Shares soar as parcel firm delivers turnaround plan

SHARES in mail and parcels firm

DX Group soared even as the firm revealed a 60pc drop in earnings.

The business reported earnings of £7.2m for the year to June 30, down from £18m a year ago, and the company made a pre-tax loss of £82.3m.

But investors have high hopes for the business, which yesterday announced a shake- up to its board. DX has been working to address operational and financial issues this year, undergoing a review and reorganisation.

The latest phase in this is a string of changes to the board which will see chairman Bob Holt step down. Lloyd Dunn will become chief executive joined by chairman Ron Series and nonexecutive directors Russell Black and Paul Goodson.

Series said a thorough review of operations will enable the board ‘to make clear and sensible decisions about recovery initiatives’.

While DX posted a loss of £18.3m in its freight division, Liad Meidar, chief investment officer at Gatemore Capital Management (DX’s largest shareholder with a 23.8pc stake) said: ‘We could not have a stronger team leading the turnaround of this part of the firm.’

Series and Dunn turned around competitor Tuffnells from a lossmaking company to one with strong operating margins. Meidar said: ‘We do not see any reason why this cannot be achieved again.’ DX shares rocketed 17.6pc, or 1.88p, to 12.5p.

The FTSE 100 finished fractionally up by 0.19 points at 7523.23.

Acacia Mining shares nosedived, reversing much of the previous day’s strong gains. Three months of negotiations between the miner’s majority shareholder, Barrick Gold Corporation, and the government of Tanzania had looked to be coming to a resolution on Thursday.

Barrick had said it would hand over a 16pc stake in three gold mines, a 50pc share of revenues from those mines and a payment of £228m. But Acacia said it had not been told of any formal proposal, and would need to approve any resolution. While Acacia said it will consider any agreement once its receives full details, its chief financial officer said the business does not have the ability to make the payment.

The dispute dates back to March when Tanzania banned exports of unprocessed gold, later hitting Acacia with a £144bn tax bill as it claimed the company had underdeclared on its export revenue.

The setback came as Acacia released its third quarter results. It said the business had been ‘resilient in the face of the challenges in Tanzania’ but gold production was 7pc lower than a year ago at 191,203 ounces.

Shares plunged 8.1pc, or 17.2p, to 194.8p. Jersey Oil and Gas

tanked as it placed shares to raise £20m. The firm will use the proceeds to fund an exploration and appraisal programme and to strengthen its balance sheet. Shares dropped 15.6pc, or 39.5p, to 214.5p.

Pearson continues to streamline its business. The education specialist is in advanced talks with a consortium of Asian private equity firms to sell its English-language school unit. The deal, understood to be worth more than £265m, could be finalised within weeks. Shares grew 0.5pc, or 3.5p, to 694.5p.

Activist investor Elliott is pushing for medical device maker Smith

& Nephew to sell parts of its business. While the activist is not one of the firm’s ten largest shareholders, it is understood to be keen to make Smith & Nephew an attractive takeover target. Shares climbed 1.1pc, or 15p, to 1428p. Land development company

Henry Boot said it had been an ‘outstanding’ year where ‘almost every deal we hoped to complete has done so’. Shares leapt 8.5pc, or 26p, to 333.5p.