DX (Group) plc Annual Report and Accounts 2016
DX (Group) plc
Annual Report and Accounts 2016 ANNUAL REPORT AND ACCOUNTS 2016
6
ANNUAL REPORT AND ACCOUNTS 2016
DX provides parcel, mail and logistics services underpinned 
by a strong focus on customer service. The Company’s 
breadth of off ering is unrivalled and it specialises in deliveries 
which are time sensitive, valuable or heavier or more 
awkward to handle (irregular dimension and weight items ). 
Our customers are predominantly B2B and we create value 
through a strong focus on the ‘FIVE Cs’:
THE ‘FIVE Cs’ OF OUR BUSINESS MODEL
We aim to provide: 
• high quality customer service across all our markets 
• solutions that provide our customers with a 
competitive advantage
• new options that off er our customers convenience 
and ﬂ exibility 
We focus on:
• controlling our costs to remain competitive
• improving productivity across the Company, 
focusing on IT, operations, property and ﬁ nance
• providing our customers with best value for the 
services they have selected 
We believe in:
• incentivising our colleagues to deliver superior 
customer service and rewarding them for a job well done
• attracting new talent and promoting existing talent 
through training and professional development
• creating a culture which encourages pride in our work and
which aims to deliver an excellent customer experience
CUSTOMERS
COST AND 
PRODUCTIVITY
COLLEAGUES
We adhere to:
• safety ﬁ rst 
• high levels of performance for our safety, health and environment 
engineering audits, swiftly resolving outstanding reported audit 
and operational licence issues
• operational scanning and proof of delivery processes, hardware 
and systems
COMPLIANCE
We target:
• eff ective cash management
• EBITDA growth
• investment in areas critical to customer service, including 
training and development, IT, equipment and facilities
CASH
DX is a leading 
independent parcel, mail 
and logistics services 
company operating 
throughout the UK  
and Ireland. 
DX offers quality service, 
high security and an  
unrivalled range of 
services, providing 
proven next-day and 
2-Man deliveries to 
business and residential 
addresses nationwide.
WHO WE ARE
AT A GLANCE
p2–3
OUR BUSINESS MODEL
p6
All models used in this report are DX 
colleagues. We thank them for their time.
CONTENTS
STRATEGIC REPORT
1 Key points
2 At a glance 
4 Chairman’s Statement
6 The ‘Five Cs’ of our business model 
7 The market
8 Chief Executive Officer’s Review
12 Strategy
14 Chief Financial Officer’s Review
17 Key performance indicators
18 Corporate responsibility
22 Principal risks and uncertainties
GOVERNANCE REPORT
24 Board of Directors
25  Chairman’s introduction to 
corporate governance
26 Governance Report
28 Audit Committee Report
29 Nomination Committee Report
30 Directors’ Remuneration Report
34 Directors’ Report
37 Statement of Directors’ responsibilities
FINANCIAL STATEMENTS
38 Independent Auditor’s Report
39  Consolidated statement of  
comprehensive income
40  Consolidated statement of  
financial position
41  Company statement of financial position
42  Consolidated statement of  
changes in equity
43  Company statement of changes in equity
44 Consolidated statement of cash flows
45 Notes to the financial statements
CHAIRMAN’S STATEMENT
p4–5
CHIEF FINANCIAL OFFICER’S REVIEW
p14–16
CHIEF EXECUTIVE OFFICER’S REVIEW
p8–11
BOARD OF DIRECTORS
p24 1
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
For more information see
Chief Financial Officer’s 
Review p14–16

KEY POINTS
DX made progress in the execution of its ‘OneDX’ 
programme whilst maintaining strong service delivery.
£287.9m
(2015: £297.5m)
REVENUE
£18.0m 
(2015: £33.7m)
EBITDA
£11.5m
(2015: £26.7m)
ADJUSTED
1
 PBT
£9.8m
(2015: £1.8m)
NET DEBT
4.9p
(2015: 10.9p)
ADJUSTED
1
 EPS
1.5p
 (2015: 4.0p)
FINAL DIVIDEND PER SHARE
For more information see
www.dxdelivery.com
FINANCIAL
• Full year results in line 
with revised management 
expectations and reflect  
the impacts outlined in H1
• Revenue of £287.9m 
(2015: £297.5m)
• EBITDA of £18.0m 
(2015: £33.7m)
• Adjusted
1
 profit before tax and 
exceptional items of £11.5m 
(2015: £26.7m)
• Exceptional (non-recurring) 
items of £92.1m – includes 
goodwill impairment of 
£88.4m (2015: nil) as 
announced with the interim 
results, a non-cash charge 
which reflected challenging 
industry conditions and 
profit decline
• Reported loss before tax 
of £82.7m (2015: profit of 
£24.8m)
• Adjusted
1
 EPS of 4.9p 
(2015: 10.9p) / Reported loss 
per share of 42.1p (2015: EPS 
of 9.9p)
• Net debt at 30 June 2016 of 
£9.8m (2015: £1.8m)
• Proposed final dividend of 1.5p 
per share (2015: 4.0p), subject 
to shareholder approval and 
in line with the Board’s 
commitment to a full year 
dividend of 2.5p per share
OPERATIONAL
• Strong focus on addressing the 
trading issues of H1 including: 
 – DX Exchange; H2 renewals 
in line with management 
expectations
 – Driver resourcing issues; now 
stabilised but ongoing higher 
costs reflect continuing 
shortages of CPC-qualified 
drivers
• Continued progress with 
‘OneDX’ programme – 
including network development 
and IT infrastructure investment
• Ongoing improvements to 
customer service including 
launch of ‘DX Parcel Exchange’ 
service, a market-leading ‘pick 
up and drop off’ solution 
• Planning appeal submitted 
and public consultations 
commenced in respect of a 
revised proposal for potential 
new central hub in the 
West Midlands
• Post period, further targeted 
investment in IT and sales
• Outcome of HMPO contract 
tender expected by the end 
of November
• Daljit Basi appointed to the 
Board as Finance Director
• Integration of Legal Post and 
First Post resumed after 
revocation of CMA’s Initial 
Enforcement Order
1  Adjusted profit before tax and adjusted EPS 
exclude amortisation of intangibles and 
exceptional items. 2
ANNUAL REPORT AND ACCOUNTS 2016
65+
2,800+
OVER 65 LOCATIONS ACROSS THE UK 
AND IRELAND
 
OVER 2,800 DAILY ROUTES
5,000+
OVER 5,000 COLLEAGUES AND 
SUBCONTRACTORS 
DX is a leading independent 
parcel, mail and logistics services 
company operating throughout 
the UK and Ireland. DX provides 
proven next-day or scheduled 
delivery services for mail, 
parcels and 2-Man deliveries 
to business and residential 
addresses nationwide. 
AT A GLANCE 3
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
REVENUE BREAKDOWN %
Parcels and freight 55%
Mail and packets 40%
Logistics 5%
55%
40%
5%
   P AR C E L S AN D 
FREIGHT
DX 1-MAN
Our ‘closed network’ operation 
handles a wide variety of 
consignments, including pallets, 
parcels and items up to 6 metres and 
ensures that the integrity of each 
delivery is maintained. We specialise 
in the delivery of irregular-shaped 
freight items, carrying consignments 
such as lamp posts and canoes, 
which are often unsuitable for 
the majority of parcel carriers. 
For the UK, DX offers next-day 
deliveries including pre-9.30am, 
pre-12pm and end-of-day delivery 
options. The DX 1-Man service 
also offers an international 
service for both outbound 
and inbound deliveries. 
Approximately two-thirds of the 
items we deliver are to business 
locations, with the remainder 
delivered to residential addresses. 
DX COURIER 
This is our fully tracked next-day 
delivery service, transporting packets, 
parcels and pouches mostly for the 
business-to-business (“B2B”) market. 
Our couriers are primarily collecting 
and delivering to branch networks, 
high streets, industrial areas and 
government premises. We offer 
pre-9am, pre-12pm and end-of-
day delivery options as well as 
specialist services for companies 
in the pharmaceutical, healthcare, 
optical and retail sectors, and 
organisations in the public sector. 
DX 2-MAN 
DX 2-Man specialises in delivering 
larger and heavier consumer 
products such as sofas, beds, 
bathrooms, kitchens and garden 
furniture. Our service includes 
delivery to a customer’s ‘room 
of choice’, whether that is 
upstairs in their home or to 
their garage or garden.
Customers can choose which day 
is most convenient to receive their 
delivery at the point of order and 
we offer a further text booking 
service for added flexibility. We 
keep customers updated with the 
progress of their delivery through 
a text or email and, on the day 
of delivery, customers receive 
a call from one of our 2-Man 
crew ahead of final delivery. 
   MA I L AN D 
PACKETS
DX EXCHANGE
DX Exchange is a bespoke B2B mail 
and parcel delivery network offering 
pre-9am delivery and post-5pm 
collection. It is made up of over 
4,500 exchanges (including Legal 
Post) across the UK and Ireland, 
which contain over 25,000 customer 
boxes. Users do not need to size, 
weigh or frank items. They simply 
add the recipient’s 3-line DX address 
and deliver the consignment to 
their local exchange. With added 
tracked services, including tracked 
specimen for the health sector, 
DX Exchange provides a secure, 
daily network, which is mainly 
used by the legal, financial and 
public sectors. It is also used as a 
site-to-site internal mail network. 
DX SECURE
Our secure courier delivery service 
operates with the highest levels 
of security in place. There are a 
number of delivery options, including 
pre-1pm, end-of-day and three-
day delivery and customers are 
informed about the progress of 
their deliveries through text and 
email. To ensure a fully audited 
delivery trail, we use photographic 
and GPS evidence of delivery, 
with signature capture. Our online 
system tracks items and enables 
the rescheduling of deliveries. DX 
Secure is ideal for high volume 
despatches of sensitive or valuable 
items or for customers looking for 
extra oversight of their deliveries.
DX MAIL 
DX Mail takes advantage of mail 
deregulation (Downstream access) 
and collects postcode-addressed 
mail from customers. It moves 
collected mail swiftly through our 
network, handing it over for ‘final 
mile’ delivery to the UK’s national 
mail operator.
Our service can offer significant cost 
savings to customers’ postal budgets 
and provides an extended time 
window along with reduced mail 
preparation time and online ordering.
 LOGISTICS 
DX LOGISTICS
DX Logistics provides a complete 
range of supply chain solutions 
serving customers across all sectors 
of the UK. We are able to develop 
solutions that are as individual 
as our customers’ businesses. 
Working with dedicated liveried 
fleets and uniformed drivers or 
on shared platforms, DX Logistics 
offers international movements 
and third party logistics capability 
and can manage the entire end-
to-end supply chain. In short, it 
provides the expertise, agility 
and flexibility to deliver solutions 
that fit our customers’ needs and 
strengthens their strategic plans.
DX KEY LOCATIONS
LOCATIONS IN THE UK  
AND IRELAND
LOCATIONS KEY
 Service centres
 Hubs 4
ANNUAL REPORT AND ACCOUNTS 2016
BOB HOLT
CHAIRMAN
CHAIRMAN’S STATEMENT
We are focused on returning the business  
to more acceptable levels of profitability.
RESULTS OVERVIEW 
After a challenging first half, when 
profitability was significantly impacted 
– principally by higher than expected 
volume erosion at DX Exchange 
and cost pressures – the Group has 
delivered an improved performance 
in the second half of the financial year. 
This reflected management actions to 
address the trading issues of the first 
half. DX’s full year results are in line with 
revised management expectations. 
Revenues totalled £287.9 million for 
the year (2015: £297.5 million). Earnings 
before interest, tax, depreciation and 
amortisation (“EBITDA”) were £18.0 
million (2015: £33.7 million) and adjusted 
profit before tax and exceptional items 
was £11.5 million (2015: £26.7 million). 
The Group generated adjusted earnings 
per share of 4.9p (2015: 10.9p). These 
results are stated before exceptional 
items of £92.1 million, which mainly 
comprised a non-cash impairment charge 
of £88.4 million after conducting a review 
of goodwill following the decline in profit. 
The balance of exceptional items was 
£3.3 million of written-off costs relating 
to the proposed new central hub in the 
West Midlands, and a £0.4 million charge 
relating to share-based payments, a non-
cash item. DX closed the year with net 
debt of £9.8 million (2015: £1.8 million). 
On a statutory basis, the loss before tax 
was £82.7 million (2015: profit of £24.8 
million) and the loss per share was 42.1p 
(2015: earnings per share of 9.9p).
A detailed review of the Group’s financial 
results is provided in the Chief Financial 
Officer’s Review.
DIVIDEND
The Board is pleased to confirm a 
proposed final dividend of 1.5p per 
share (2015: 4p per share), in line with 
the commitment given at the half year. 
Together with the interim dividend of 
1.0p per share, paid on 3 June 2016, this 
takes the total dividend for the year to 
2.5p per share (2015: 6.0p per share).
The final dividend, which is subject to 
shareholder approval, will be paid on 
13 December 2016 to shareholders on 
the register on 11 November 2016. 
TRADING OVERVIEW 
As we previously reported, the Group’s 
profitability has been substantially 
impacted by three major factors. The 
most significant of these was an increase, 
above that expected, in volume erosion 
at the DX Exchange operation, our 
bespoke secure document handling 
service. As we have highlighted 
previously, this business is subject to 
e-substitution and has a largely fixed 
cost base. Nonetheless, it remains an 
important, cost-effective service to both 
public and private sector companies, 
especially for the legal, financial and 
healthcare sectors. In May, we acquired 
the trade and assets of a Scottish 
counterpart, The Legal Post (Scotland) 
Limited and First Post Limited, and, 
following the revocation of an order by 
the Competition and Markets Authority in 
early September, we are now combining 
these assets within our own operations 
in Scotland, which will enhance customer 
service and generate savings.
The major cost base pressure in the first 
half arose from a shortage of drivers 
certified with a Certificate of Professional 
Competence (“CPC”). As well as having 
a direct cost impact, it also materially 
affected operational efficiencies and 
so further increased the Group’s overall 
costs of delivery. We have addressed 
and stabilised these issues although 
driver costs have risen nonetheless. This 
reflects the sector-wide shortage of CPC-
qualified drivers – an issue our industry 
trade bodies continue to highlight.  5
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
We made solid progress with our ‘OneDX’ 
programme over the year. This major 
programme is driving an organisational 
transformation and bringing together 
all our operations onto a common 
operating platform, with the latest 
technology supporting systems and 
processes. A key component includes 
the phased implementation of a new 
routing and scheduling system across 
our operations. At the same time, we 
are also optimising and developing 
our site network, with the goal of 
delivering both strong customer service 
benefits and operational efficiencies. 
As we have previously reported, we 
intend to develop a major new UK 
distribution hub and, last year, agreed 
the purchase of a 44-acre site in the West 
Midlands, subject to obtaining planning 
consent. Unfortunately, as previously 
announced, at a hearing in mid-May 2016 
the local authority declined our planning 
application. We are now proceeding with 
an appeal of this decision and have 
commenced public consultation in regard 
to a revised planning application. We are 
also considering suitable alternative sites. 
BOARD AND COLLEAGUES 
After nearly ten years in his role, Ian Pain, 
Chief Financial Officer, has decided 
to step down and will be leaving the 
Company at the end of October. 
On behalf of the Board, I would like to 
thank Ian for his tremendous contribution 
to DX over this time and wish him well 
in his new ventures. I am delighted to 
welcome Daljit Basi, Finance Director, 
who has now joined the Board. 
In an exceptionally challenging year, 
the DX team has responded with 
determination and energy, and I would 
like to thank everyone for the hard work 
and commitment they have shown. 
OUTLOOK
We remain focused on the ongoing 
delivery on our ‘OneDX’ programme, 
sales execution and cost control. While 
the outcome of the HMPO tender 
process and our planning appeal have 
yet to conclude, we expect to be in a 
position to provide a further update on 
their progress by the end of November. 
DX is primarily a UK operation with 97% 
of its revenues and 98% of its costs 
arising in the UK and denominated in 
sterling. The exception is a wholly-owned 
subsidiary trading solely in the Republic 
of Ireland. The UK’s decision to leave the 
European Union is not anticipated to 
impact on DX’s trading performance 
other than to the extent that the UK 
economy as a whole is affected. 
BOB HOLT
CHAIRMAN 6
ANNUAL REPORT AND ACCOUNTS 2016
DX provides parcel, mail and logistics services underpinned 
by a strong focus on customer service. The Company’s 
breadth of offering is unrivalled and it specialises in deliveries 
which are time sensitive, valuable or heavier or more 
awkward to handle (irregular dimension and weight items ). 
Our customers are predominantly B2B and we create value 
through a strong focus on the ‘FIVE Cs’:
THE ‘FIVE Cs’ OF OUR BUSINESS MODEL
We aim to provide: 
• high quality customer service across all our markets 
• solutions that provide our customers with a  
competitive advantage
• new options that offer our customers convenience  
and flexibility 
We focus on:
• controlling our costs to remain competitive
• improving productivity across the Company,  
focusing on IT, operations, property and finance
• providing our customers with best value for the  
services they have selected 
We believe in:
• incentivising our colleagues to deliver superior  
customer service and rewarding them for a job well done
• attracting new talent and promoting existing talent  
through training and professional development
• creating a culture which encourages pride in our work and 
which aims to deliver an excellent customer experience
CUSTOMERS
COST AND 
PRODUCTIVITY
COLLEAGUES
We adhere to:
• safety first 
• high levels of performance for our safety, health and environment 
engineering audits, swiftly resolving outstanding reported audit 
and operational licence issues
• operational scanning and proof of delivery processes, hardware 
and systems
COMPLIANCE
We target:
• effective cash management
• EBITDA growth
• investment in areas critical to customer service, including  
training and development, IT, equipment and facilities
CASH 7
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
UK parcel volumes forecast  
to grow 4%
1
 per annum.
THE MARKET
PARCELS AND FREIGHT MARKET
The UK parcels market has experienced 
relatively strong growth in recent years 
and volumes are forecast to grow by 
4%
1
 per annum in the medium term. This 
growth continues to be driven largely 
by the increase in online shopping. 
Approximately 14% of all UK retail sales 
are transacted online
1
, with online 
deliveries expected to grow by 10% 
to 12%
2
 year-on-year until 2020. As 
online shopping becomes increasingly 
popular, the industry has undergone 
a transformation as it continues to 
evolve to meet demand. Consumers 
and businesses are now ordering larger 
items and demanding greater flexibility 
with delivery as well as increased 
transparency in tracking deliveries. As a 
result, specified day services (including 
next-day delivery) continue to gain 
market share, partly at the expense 
of economy services. Another trend 
reflecting consumer requirement for 
greater flexibility is the growth of parcel 
access points, which handle deliveries 
and returns, and can also be used instead 
of post offices to post parcels. ‘Click 
and collect’ shopping is also growing 
although this is more likely to substitute 
in-store shopping than parcel deliveries.
While the UK has one of the most 
developed parcels delivery markets in 
Europe – consisting of B2B (business-to-
business), B2C (business-to-consumer) 
and C2X (consumer-to-business-
or-consumer) – it is also one of the 
most competitive. The high number 
of operators in the parcels delivery 
market underscores the need to offer 
a high quality, differentiated service. 
To date, within parcels, DX has been 
most active in the higher margin B2B 
segment, which accounts for 62% 
of DX’s total revenues. However, the 
Group is also well placed to grow its 
market share of B2C transactions. 
Over the past few years, DX has been 
working on increasing its service offering 
in both the B2B and B2C markets. DX 
has focused on building its market share 
in express deliveries, secure services 
for valuable items and 1-Man and 
2-Man deliveries for heavier and bulkier 
items (irregular dimension and weight 
(“IDW” items)). The IDW segment of the 
parcels market provides DX with the 
opportunity to maximise the number 
of items per drop and the movement of 
larger items and yield greater revenues. 
This segment consists of fewer of the 
traditional parcel carriers as they do 
not possess the capability to operate 
in this market which is experiencing 
sustained growth. DX has also developed 
partnerships to create a market-leading 
‘pick up and drop off’ solution. 
Customers expect high levels of 
information about the delivery of their 
online orders. This starts with the retailer 
providing good delivery information 
during the browsing stage of the 
purchase transaction. Once the goods are 
in transit customers increasingly expect 
to be updated, the most important times 
for this are; on the day before delivery 
is due; on the morning of the delivery. 
DX’s launch last year of DX2Me is aimed 
at providing customers with greater 
transparency over deliveries and remains 
a focus for further development.
MAIL AND PACKETS MARKET
For the past decade, the mail market has 
been declining as mail communication 
migrates to electronic communication. 
This well-documented structural decline 
has steadied in recent years and the 
attrition rate for single piece mail has 
been at approximately 4.4%
3
 per annum 
since 2012/2013 for the market as a 
whole, with higher levels of substitution 
in the business sector than the consumer 
sector. Prices for single piece mail have 
been rising with greater increases for 
metered mail than for stamped mail. 
DX’s core DX Exchange product is 
present in the B2B single piece market 
and exposed to the e-substitution trend. 
However, it remains a highly differentiated 
and bespoke service that continues to 
provide a valuable customer service 
through its bespoke extended pick-up 
and delivery times. 
DX is also active in the B2X (business-to-
business-or-consumer) bulk mail market, 
providing downstream access services 
(“DSA”). DX collects second-class mail 
from customers which it subsequently 
sorts and transports to its contracted 
access supplier for ‘final mile’ delivery. 
The rate of decline in the bulk mail market 
has been lower than for single piece mail 
and has been an area of growth for DX 
over the last few years. 
LOGISTICS MARKET
To increase competitiveness in the 
growing e-commerce market, many 
companies and retailers are now 
seeking to improve their propositions by 
enhancing their distribution networks. 
As a result, the logistics market has 
seen an emerging trend whereby 
retailers are integrating logistics 
providers into the supply chain.
The integration of logistics into the retail 
supply chain is a promising opportunity 
for medium-sized providers. DX is in 
a very strong position in this market 
because we are able to offer a compelling 
combination of flexibility and robust 
solutions together with access to our 
core distribution network to provide 
additional complementary services. 
Sources:
1 Ofcom, The Communication Market 
Review 2015.
2 IMRG MetaPack UK Delivery Index Report 
August 2016.
3  Ofcom, Review of the Regulation of Royal 
Mail 2016. 8
ANNUAL REPORT AND ACCOUNTS 2016
INTRODUCTION
It has been an especially difficult year, 
with the specific trading pressures we 
reported in the second quarter of the 
year impacting profitability substantially. 
Our focus has been on responding to 
these pressures as well as continuing to 
drive forward our ‘OneDX’ programme.
While we closed the seasonally important 
second half in better shape, there is 
still work to be done. Nonetheless, 
the Board remains confident in its 
ability to negotiate the challenges 
and opportunities and deliver its 
strategy for the medium term. 
REVIEW OF ACTIVITIES
Our largest activity, Parcels and freight, 
delivered a better revenue performance 
than the prior year, helped by strong 
growth in our Courier service. However 
revenues at our Mail and packets 
operation contracted, with higher than 
expected levels of volume attrition at 
DX Exchange significantly impacting 
Group profitability. While Logistics saw 
revenue decrease after exiting low margin 
contracts, it won a major contract with 
IKEA which we expect to grow further. 
Profitability in the first half of the year 
was, as we reported, additionally hit by 
a shortage of suitably qualified drivers. 
This shortage is an industry-wide issue 
and stems from new legislation requiring 
drivers operating goods vehicles of 
over 3.5 tonnes to obtain a Certificate 
of Professional Competence (“CPC”) 
qualification. The shortage caused 
both an increase in driver costs, with 
agency drivers being used, and an 
additional rise in delivery costs as, in 
the absence of CPC-qualified drivers, 
smaller transit vans were used in place 
of goods vehicles to maintain customer 
service. While the temporary additional 
costs have been removed, ongoing 
driver costs are much higher, reflecting 
the shortages across the industry.
We highlighted the slow conversion 
of the new business pipeline in the 
parcels operation in the second 
quarter of the year, which impacted 
Group profitability. Since then we have 
invested further in our sales capability, 
restructuring the teams. The sales 
pipeline at the close of the financial year 
is above the level of the prior year and 
we are also focused on cross-selling 
opportunities across our services. 
PARCELS AND FREIGHT
This operation comprises three core 
services: DX 1-Man, specialising 
in irregular dimension and weight 
(“IDW”) items; DX Courier, providing 
next-day parcel services mostly 
for the B2B market; and DX 2-Man, 
offering a B2C home delivery solution 
for heavier and bulkier items. 
Revenue from Parcels and freight 
increased by 3.4% year-on-year to 
£159.3 million and accounted for 55.3% 
of total revenue (2015: 51.8%). Growth 
was led by DX Courier, which increased 
sales by 12.6% and has developed a 
strong presence in a number of sectors 
including pharmaceuticals, optical, 
public sector and retail. Overall revenue 
growth was somewhat dampened 
by the reduction in fuel surcharges 
with lower oil prices, and by the run-
off from the exit of commercially 
unattractive contracts at DX 1-Man 
and DX 2-Man last year. However, DX 
2-Man secured some significant wins 
in the second half which will benefit 
the new financial year and there are 
attractive opportunities for DX 1-Man. 
We launched DX2Me, a tracking 
application that enables consumers 
to track their deliveries in real time 
and to pre-book delivery slots in 
our DX 2-Man service, and we will 
continue to focus on initiatives to 
improve the customer experience.
£159.3m
REVENUE
55%
 
PARCELS AND FREIGHT
£113.8m
REVENUE
40%
 
MAIL AND PACKETS
£14.8m
REVENUE
5%
 
LOGISTICS
CHIEF EXECUTIVE OFFICER’S REVIEW
There is still work to be done but the Board is 
confident in its ability to negotiate the near-term 
challenges and deliver its strategy for the 
medium term.
PETAR CVETKOVIC
CHIEF EXECUTIVE OFFICER 9
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
MAIL AND PACKETS
This operation comprises three core 
services: DX Exchange, a B2B mail service 
providing its customers with extended 
collection and delivery times; DX 
Secure, which provides market-leading 
levels of security; and DX Mail, a low 
cost mail service offering Downstream 
access for smaller volume users. 
Revenues from Mail and packets 
decreased by 2.2% to £113.8 million and 
accounted for 39.5% of total revenue 
(2015: 39.1%). As previously highlighted, 
DX Exchange – whose customers are 
mainly from the legal, governmental, 
financial and healthcare sectors (both 
public and private) – experienced a 
higher than anticipated level of revenue 
attrition in the first half, leading to a 
management revision of forecasts for 
the year. Renewals in the second half, 
which includes April, an important 
renewal month in the governmental 
sector, were in line with management 
expectations. Revenue for the year from 
DX Exchange showed a decline of 10.1% 
compared to 5.4% in 2015. This decline 
significantly impacted profitability since 
the service has a mainly fixed cost base; 
deliveries and collections are made to 
all 4,500 document exchanges around 
the UK and Ireland every morning and 
every evening, largely irrespective of 
the volume of mail or the number of 
customers. Volume erosion is expected 
to continue, with digitisation and 
electronic communications driving 
this trend, but DX Exchange remains a 
valuable service to its customers and 
we will seek to support renewal levels 
with high levels of customer service.
In order to prolong the economic life of 
the DX Exchange service in Scotland as 
a competitor to Royal Mail, in May 2016 
we acquired the trade and assets of The 
Legal Post (Scotland) Limited (“Legal 
Post”) and First Post Limited (“First 
Post”) for a total cash consideration 
of £3.25 million. Legal Post provides a 
document exchange and postal service 
in Scotland, and First Post operates 
a Downstream access mail service in 
Scotland. The acquired operations on a 
standalone basis generate £0.6 million 
CASE STUDY
TRUSTED PARTNER  
TO IKEA
IKEA wanted to find a new partner to support 
its next stage of development and invited DX  
to tender, attracted by our broad range of 
capabilities and service focus. 
After a successful tender, DX was 
awarded a contract to manage IKEA’s 
home deliveries for its online store in 
two regions across the UK. In choosing 
DX, IKEA highlighted our:
• strong focus on the customer 
experience 
• shared values and culture 
• transparent cost approach 
• open communications
• flexibility 
• diverse service capability
IKEA was so impressed with our 
solution, partnership approach and 
performance that they invited us to 
support the home delivery service for 
the new store in Reading – IKEA’s first 
new store opening in the UK for seven 
years. We were awarded the contract 
and were delighted to support the 
store’s opening in July 2016.  10
ANNUAL REPORT AND ACCOUNTS 2016
9% £130k 
CASE STUDY
LAUNCH  
OF ‘DX 
PARCEL 
EXCHANGE’
Alternative collection 
points are a growing 
trend in the retail 
industry. IMRG, the UK’s 
industry association for 
online retail, reports 
further increases in 
consumer use of ‘click 
and collect’ services, 
which are now used for 
23%
1
 of online purchases.
Similarly, there has been a significant 
increase in the take up of third-party secure 
collection points as a delivery option. 
Third-party collection points are now used 
by 14%
1
 of online shoppers.
DX launched ‘DX Parcel Exchange’ in 
September 2015 and it now offers 
consumers over 1,000 collection points 
across the UK. DX has developed this 
capability in partnership with InPost, 
utilising InPost’s ‘intelligent lockers’ system 
and manned locations in key sites across 
the country. The popularity of these types 
of services is growing due to their simplicity 
and 24-hour accessibility. 
For online retailers and traditional retailers 
seeking to add further capability to their 
retail offering, DX’s ‘Parcel Exchange’ 
network can provide a UK-wide collection 
footprint for ‘Click and Collect’ services.
Source:
1 IMRG UK Consumer Home Delivery Review 2016.
REDUCTION IN CO
2
 EMISSIONS 
COMPARED TO THE PREVIOUS YEAR
OVER £130K RAISED IN THREE YEARS 
FOR SCOTTY’S LITTLE SOLDIERS 11
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
CHIEF EXECUTIVE OFFICER’S REVIEW CONTINUED
of EBITDA on £5.2 million of revenue. 
They made a one month contribution 
of £0.5 million in revenue to the Group’s 
full year results. We believe that there 
is an attractive opportunity to combine 
our respective services to deliver both 
customer and operational benefits. We 
estimate that if fully integrated, cost 
savings from the removal of duplicate 
routes and exchanges can deliver an 
additional £0.6 million of annualised 
EBITDA. In July 2016, the Competition & 
Markets Authority (“CMA”) commenced a 
review of the acquisition, serving an Initial 
Enforcement Order at the same time, 
which halted our integration process. 
However, as reported on 16 September, 
this order has been revoked and we are 
now continuing with the combination to 
deliver the expected customer service 
enhancements and cost savings.
DX Secure increased revenues by 9.0% 
year-on-year, aided by good growth 
in both existing and new accounts. 
As previously reported, our contract 
with Her Majesty’s Passport Office, 
which was extended to July 2016, is 
now under tender and we anticipate 
an outcome in October 2016.
‘DX Parcel Exchange’, which we 
launched in the first half, has been 
well received by customers. Offering a 
market-leading ‘pick up and drop off’ 
solution, using the networks of other 
third party providers, it comprises over 
1,000 delivery and collection points 
at supermarkets, petrol stations, retail 
parks and other manned locations. 
LOGISTICS
DX Logistics provides a full outsourcing 
service to customers who wish to 
outsource their vehicle fleet operations, 
with DX able to provide additional services. 
Revenue from Logistics services reduced 
by £12.2 million to £14.8 million and 
accounted for 5.1% of total revenue 
(2015: 9.1%). The reduction reflected 
the cessation of low margin contracts 
early in the year. However, we also 
secured a major contract with IKEA 
in the year to support its operations 
in London and the Midlands. We also 
supported the opening of IKEA’s 
new site in Reading this summer.
‘ONEDX’ PROGRAMME
Our ‘OneDX’ programme has three 
goals; improved customer service, 
the creation of an optimised network, 
and the unification of our services 
onto a single operating platform, all 
supported by strong IT capability. 
The major part of our capital expenditure 
over the year was focused on our IT 
infrastructure. We continued to invest 
in our new routing and scheduling 
system, which brings greater service 
and operational benefits through 
‘dynamic routing’. As previously 
highlighted, the roll-out is in phases 
and is expected to continue over the 
next 18 months. We also made good 
progress with our next generation 
‘OneDX’ telephony and contact 
management system, with installation 
approaching completion. The solution 
provides us with the ability to view a 
customer across voice, email, webchat 
and social media, and will help to drive 
service standards as well as future 
innovation in customer engagement. 
We also continued to invest in our site 
network and during the year opened 
three new service centres in Norwich, 
Bristol and Motherwell. The opening of 
these new larger sites has enabled us to 
close six smaller sites. Since 30 June 2016
we have opened a service centre in 
Swanley which will enable us to close a 
further five sites. Our plans to develop 
a major new central hub at a 44-acre 
site in the West Midlands were stalled 
in May when our planning application 
for its development was turned down. 
As we have reported, our purchase of 
this site was conditional on planning 
consent and we have now submitted 
and commenced public consultations in 
regard to a revised planning application. 
We are also considering other sites.
COLLEAGUES
I would like to thank all my colleagues 
at DX for their hard work over the year 
and to welcome new members of the 
DX team. I would also like to add my 
personal thanks to Ian Pain, our long-
standing Group Chief Financial Officer, 
who will be leaving the Company at the 
end of October, and to congratulate 
our Finance Director, Daljit Basi, 
on his promotion to the Board.
OUTLOOK
We continue to take positive steps 
to address the Group’s performance 
and to support this we are making 
further targeted investment in IT and 
sales. While there are still uncertainties 
ahead as we await the outcome of 
the HMPO tender process and our 
planning appeal, we have confidence 
that our business transformation 
plans will deliver long term benefits. 
PETAR CVETKOVIC
CHIEF EXECUTIVE OFFICER
5 OCTOBER 2016 12
ANNUAL REPORT AND ACCOUNTS 2016
PRODUCT AND SERVICE CAPABILITY
‘ONEDX’
SERVICE PERFORMANCE
OUR PEOPLE
CUSTOMER
DX’s primary focus is to provide a market-leading 
service for its customers and build competitive 
advantage by offering the broadest range of products 
and capability in the parcels, mail and logistics sector 
at commercially attractive prices. We aim to have our 
strategy delivered by the best people.
STRATEGY
‘ONEDX’ 
Our core focus has been to optimise 
our three separate networks and 
systems onto a single platform that 
will deliver our services under one 
brand and with a unified management 
structure. This programme of 
combining operations, fleet, 
properties and systems will increase 
volume capacity and offer new 
capability to handle freight, parcels 
and mail whilst enabling DX to build a 
more enhanced product portfolio 
utilising the latest technology.
PRODUCT AND  
SERVICE CAPABILITY
We aim to offer products and 
services that deliver competitive 
advantage to our customers, 
leveraging our ‘OneDX’ network 
and our extensive range of 
products and services. 
OUR PEOPLE
We aim to create a market-
leading culture by listening to 
our customers and supporting 
our colleagues with training 
programmes so that we deliver 
our brand promise, ‘DELIVERED 
EXACTLY’, with the best people. 
OUR STRATEGY COMPRISES THREE CORE AREAS: 13
FINANCIAL STATEMENTS GOVERNANCE REPORT STRATEGIC REPORT
CASE STUDY
‘ONEDX’ NETWORK PROGRESS
As part of our 
‘OneDX’ vision, 
DX has made 
significant progress 
in optimising 
and developing 
our network. 
We have now opened a number of 
new sites that can deliver the full 
product mix from a single location. 
During the year, we invested in three 
new larger service centres, which 
replaced six smaller sites. This takes 
the number of new larger locations 
opened under our programme to 11, 
with 24 sites closing. 
These new sites are now delivering 
improved service and efficiency gains 
through streamlining the management 
of all freight, parcels and mail under 
one management team.  14
ANNUAL REPORT AND ACCOUNTS 2016
DX has had a challenging year, with a number 
of factors impacting profitability.
CHIEF FINANCIAL OFFICER’S REVIEW
IAN PAIN
CHIEF FINANCIAL OFFICER
SUMMARY
DX results have been significantly 
impacted by a number of factors, as 
previously reported. Two key factors were 
a higher than anticipated level of volume 
erosion at DX Exchange and increased 
operating costs, which primarily arose 
from driver resourcing issues. Slower 
new business conversion across other 
services also impacted results. 
Revenue at £287.9 million is 3.2% behind 
the prior year’s result largely due to a 
higher than anticipated decline in DX 
Exchange revenue and the cessation of 
low margin contracts in Logistics. This 
decline was partially offset by double 
digit volume growth in our Courier 
and Secure services. Despite higher 
volumes at our 1-Man service, revenues 
remained flat, reflecting a fall in average 
prices mainly related to the reduction 
in revenue from fuel surcharges. We 
secured a major new Logistics contract 
with IKEA that came fully on stream in 
October 2015. This new contract has 
grown strongly during 2016 and will 
benefit revenues in the new financial year.
Underlying operating profit was £11.9 
million (2015: £27.2 million). This is stated 
before exceptional items amounting to 
£92.1 million, which included two non-
cash items totalling £88.8 million. These 
related to the impairment of goodwill 
(£88.4 million) and the cancellation of 
share incentive schemes (£0.4 million).
During the year the Company paid 
dividends of £10.0 million (2015: £8.0 
million) and £3.1 million including costs (of 
the £3.4 million total) for the acquisition 
of the trade and assets of The Legal 
Post (Scotland) Limited (“Legal Post”) 
and First Post Limited (“First Post”). 
Net debt at 30 June 2016 was £9.8 
million (2015: £1.8 million). Operating 
cash flow was £10.7 million (2015: £27.7 
million) and funded £6.5 million of 
capital expenditure (2015: £9.9 million). 
2016 
£m 
Trading
2016 
£m 
Exceptional
2016 
£m 
Total
2015 
£m 
Total
Revenue 287.9 – 287.9 297.5
Earnings before interest, tax, depreciation 
and amortisation (“EBITDA”) 18.0 – 18.0 33.7
Depreciation (3.0) – (3.0) (3.4)
Amortisation of software and 
development costs (3.1) – (3.1) (3.1)
Underlying results from operating 
activities 11.9 – 11.9 27.2
Amortisation of other intangible assets (2.1) – (2.1) (1.9)
Exceptional items – (92.1) (92.1) –
Reported results from operating activities 9.8 (92.1) (82.3) 25.3
Net finance costs (0.5) – (0.5) (0.5)
Share of profits from associate 0.1 – 0.1 –
Profit/(loss) before tax 9.4 (92.1) (82.7) 24.8
Tax (1.7) – (1.7) (4.9)
Profit/(loss) for the year 7.7 (92.1) (84.4) 19.9
Foreign currency translation differences (0.1) – (0.1) –
Total comprehensive income/(expense) 
for the year 7.6 (92.1) (84.5) 19.9
EPS – adjusted (pence) 4.9 10.9
  – basic (pence) 3.8 (45.9) (42.1) 9.9 15
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
REVENUE BY SEGMENT
A segmental breakdown of Group 
revenue is shown below and a review of 
each segment’s performance is provided 
in the Chief Executive Officer’s Review:
2016 
£m
2015 
£m
Parcels and freight 159.3 154.1
Mail and packets 113.8 116.4
Logistics 14.8 27.0
Revenue 287.9 297.5
EBITDA
Earnings before interest, tax, depreciation 
and amortisation (“EBITDA”) for the year 
to 30 June 2016 is £18.0 million (2015: 
£33.7 million). 
The significant decline in profitability 
reflected the three major factors 
previously discussed, and which are 
outlined below. 
The decline in DX Exchange revenues 
directly impacted on profitability since 
the service is supported by a largely 
fixed cost base. While we continue to 
expect volume erosion, reflecting the 
continuing trend towards digitisation 
and e-substitution, we are seeking 
to minimise erosion by maintaining 
high levels of customer service. 
DX’s increased cost base pressures 
mainly arose from driver resourcing 
issues. As outlined in the Chief Executive 
Officer’s Review, this drove a two-fold 
impact on DX’s cost base, with more 
expensive agency drivers being used 
as well as smaller less efficient transit 
vans in place of goods vehicles. 
A third impact on profitability was the 
new business pipeline in the parcels 
operation, which converted potential new 
business more slowly than anticipated. 
A reorganisation of and reinvestment 
in the sales force is continuing in order 
to accelerate the identification and 
conversion of new business opportunities. 
EXCEPTIONAL ITEMS
Exceptional items for the year amounted 
to £92.1 million (2015: nil) and comprised 
three charges which are summarised 
below. 
The largest exceptional charge comprised 
a non-cash item of £88.4 million which 
followed a review of goodwill in the first 
half of the year, in accordance with the 
requirements of IAS 36 ‘Impairment of 
assets’. The value-in-use method used 
in the review supported a carrying 
value of £102.4 million and therefore 
an impairment of £88.4 million was 
recognised. See note 9 to the financial 
statements for further details.
Costs of £3.3 million relating to the 
proposed acquisition and development 
of a new hub in the West Midlands 
were also expensed. This followed 
the local authority’s decision in May 
to decline our planning application. 
While our appeal against this decision 
may be successful and some of the 
planning and design costs are likely 
to be applicable to alternative sites, 
given the lack of clarity at the balance 
sheet date, DX considered it prudent 
to expense all planning and acquisition 
costs relating to this proposed new hub.
The third exceptional item comprised 
a non-cash share-based payments 
accelerated charge of £0.4 million (2015: 
nil). This followed the cancellation of the 
Company Share Option Plan (“CSOP”) 
and Save As You Earn (“SAYE”) schemes. 
2016 
£m
2015 
£m
Impairment 
charges 88.4 –
Planning and 
acquisition costs 
on proposed 
hub 3.3 –
Share-based 
payments 
accelerated 
charge 0.4 –
Exceptional items 92.1 –
ACQUISITION OF LEGAL POST AND 
FIRST POST
In May 2016, DX acquired the trade and 
assets of Legal Post and First Post from 
First Scottish Group Limited (“First 
Scottish”) for a total consideration of 
£3.25 million in cash. An initial £3.0 
million of the total consideration and £0.1 
million of costs were paid in the year. The 
balance of the purchase consideration 
has been paid after the financial year 
end. The consideration and costs were 
funded by a combination of existing cash 
and loan facilities. DX’s full year results 
benefited from a revenue contribution 
totalling £0.5 million (one month’s 
trading) from Legal Post and First Post.
Our DX Exchange service and Legal 
Post face identical challenges, namely 
the continuing trend for e-substitution 
and the fact that due to the fixed 
cost nature of the services, costs 
cannot easily be reduced directly in 
line with a decrease in mail volumes. 
The premise for the acquisition was 
therefore to combine our respective 
services into one fixed cost network, 
thereby providing for substantial cost 
savings and extending the economically 
sustainable life of this service for our 
combined customer base in Scotland.
Both DX Exchange and Legal Post 
offer a next-day B2B mail service and 
both compete directly with Royal 
Mail’s 1
st
 Class post service offering.
As previously announced, in July, the 
Competition & Markets Authority 
(“CMA”) informed us that it was 
reviewing this acquisition and therefore 
served an Initial Enforcement Order 
prohibiting further integration of our 
DX Exchange and DX Mail services 
operations with those of Legal Post and 
First Post. However, as we reported 
on 16 September, the CMA has now 
revoked the Initial Enforcement Order 
and we have resumed the integration. 16
ANNUAL REPORT AND ACCOUNTS 2016
CHIEF FINANCIAL OFFICER’S REVIEW CONTINUED
CASH FLOW
2016 
£m
2015 
£m
Net cash profit 
(note 26) 14.6 34.0
Net change in 
working capital 0.1 (2.7)
Interest paid (0.4) (0.4)
Tax paid (3.6) (3.2)
Cash generated from 
operating activities 10.7 27.7
Cash generated from operating 
activities (after tax) was £10.7 million 
and represented 59% of EBITDA (2015: 
82%). DX maintained its excellent 
performance on debtor days which at 23 
days remains industry leading. There was 
a £0.1 million improvement in working 
capital where an increase in other 
creditors offset a reduction in deferred 
income as the DX Exchange declined. 
NET ASSETS
Net assets decreased by £94.1 million 
largely as a result of the recognition of 
the impairment charge against goodwill 
reflected in non-current assets. 
 
2016 
£m
2015 
£m
Non-current assets 133.9 221.1
Trade and other 
receivables 39.1 38.8
Net cash 4.3 7.0
Revolving credit 
facility (6.5) –
Current liabilities 
excluding debt (60.1) (60.7)
Non-current liabilities 
excluding debt (3.2) (3.5)
Term loan (7.6) (8.8)
Deferred loan issue 
costs 0.2 0.3
Net assets 100.1 194.2
NET DEBT
Net debt at 30 June 2016 stood at 
£9.8 million (2015: £1.8 million), which is 
equivalent to 54% of EBITDA (2015: 5%). 
2016 
£m
2015 
£m
Term loan 7.6 8.8
Cash and cash 
equivalents (4.3) (7.0)
Revolving credit 
facility 6.5 –
Net debt 9.8 1.8
CAPITAL EXPENDITURE
We have continued to invest in the 
Group’s operational IT infrastructure 
under the ‘OneDX’ programme 
although, in light of lower profits, capital 
expenditure was lower than the prior year.
As part of our continued commitment to 
improve customer service and increase 
efficiency, we are implementing a new 
route planning system which will drive 
greater efficiencies in our collection and 
delivery routes. We are also investing in 
a next generation telephone and contact 
management system across the business.
The ‘OneDX’ programme includes 
network optimisation and development. 
During the year, we invested in three 
new larger service centres, which has 
enabled us to close six smaller sites.
2016 
£m
2015 
£m
IT hardware and 
development costs 3.2 5.4
Property costs 1.6 1.2
Operations 1.2 1.1
Service development 0.5 1.1
6.5 8.8
Acquired from City 
Link administrators:
–  Intangible assets 
acquired – 1.0
–  Tangible assets 
acquired – 0.1
Total capex 6.5 9.9
MOVEMENT ON RESERVES
A capital reduction, approved by 
shareholders on 24 March 2016, was 
confirmed by the High Court and became 
effective on 20 April 2016. The purpose 
of the capital reduction was to increase 
distributable reserves following the 
goodwill impairment. The share premium 
account was cancelled in full transferring 
£181.4 million into distributable reserves.
TAXATION
The underlying effective tax rate for 
the year was 18.1% (2015: 19.8%). The 
difference between this rate and the 
prevailing 20.0% UK corporation tax 
rate reflects the impact of capital 
allowances from the long term capital 
investment programme and because 
some of the profit derived in the year 
is from DX’s operations in Eire which 
has a lower rate of corporation tax.
EARNINGS PER SHARE 
Adjusted earnings per share, which 
excludes amortisation of intangibles and 
exceptional items, was 4.9p (2015: 10.9p). 
 
2016 
£m
2015 
£m
Results from 
operating activities 
before exceptional 
items 9.8 25.3
Add back/(deduct):
–  Amortisation of 
intangibles 2.1 1.9
– Finance costs (0.5) (0.5)
–  Share of profits 
from associates 0.1 –
Adjusted profit 
before tax 11.5 26.7
Tax charge (1.7) (4.9)
Adjusted profit 
after tax 9.8 21.8
 
Adjusted earnings 
per share (pence) 4.9 10.9
Basic earnings per 
share (pence) 3.8 9.9
DIVIDENDS
The Board has proposed a final dividend 
of 1.5p which, subject to shareholder 
approval, takes the total dividend for 
the year to 2.5p (2015: 6.0p). The final 
dividend is payable on 13 December 
2016, to shareholders registered on 
11 November 2016, and will have an ex-
dividend date of 10 November 2016.
By order of the Board
IAN PAIN
CHIEF FINANCIAL OFFICER
5 OCTOBER 2016 17
FINANCIAL STATEMENTS GOVERNANCE REPORT STRATEGIC REPORT
£287.9m
 (2015: £297.5m)
REVENUE
£18.0m 
(2015: £33.7m)
EBITDA
£10.7m
 (2015: £27.7m)
CASH GENERATION 
(FROM OPERATING ACTIVITIES)
£9.8m
 (2015: £1.8m)
NET DEBT
3.8p
 (2015: 9.9p)
REPORTED EPS (TRADING)
4.9p
 (2015: 10.9p)
ADJUSTED EPS
KEY 
PERFORMANCE 
INDICATORS
DX uses key performance indicators 
(“KPIs”) to assess the development 
and underlying business performance 
of the Group. These KPIs are reviewed 
periodically to ensure they remain 
appropriate and meaningful measures 
of the Group’s performance. 18
ANNUAL REPORT AND ACCOUNTS 2016
1
2
3
Our commitment to Corporate Social Responsibility (“CSR”) runs 
through everything we do and is central to our brand and our 
reputation in the marketplace.
Our CSR policy is founded on four cornerstones: 
• treating colleagues with respect and integrity 
• being responsible and giving back to the community  
 through the support of charities 
• reducing our environmental impact 
• prioritising health and safety issues
CORPORATE RESPONSIBILITY
ENVIRONMENT 
We recognise that the nature of our 
business has an unavoidable impact 
on the environment. However our aim 
is to minimise our overall impact in a 
responsible manner.
Our impact on the environment primarily 
arises from our vehicle fleet, which creates 
a carbon footprint, particularly in the form 
of diesel emissions. Our commercial fleet 
accounts for approximately 75% of our 
Scope 1 and 2 carbon footprint. For this 
reason much of our focus and efforts to 
reduce our impact on the environment is 
orientated towards vehicle efficiency and 
route optimisation.
The DX environmental strategy focuses 
on reducing our carbon footprint by 
accurately reporting our impact on the 
environment and then concentrating on 
improvement activity to minimise that 
impact. As a result of this effort, the DX 
Environmental Management System was 
awarded a certification of ISO 14001:2015 
in June 2016.
We are now seeing consistent reductions 
in our carbon footprint (Scope 1 and 
2) as shown in the table below. In the 
2016 financial year, our carbon footprint 
has reduced to 32,346 tonnes CO
2
 
emissions, which represents a 9% 
reduction compared to the previous 
year. The reduction is almost exclusively 
related to improved efficiencies 
with our commercial vehicle fleet in 
respect to both design standards and 
route optimisation programmes.
We continue to focus on reducing fuel 
emissions and, following recent trials, 
we are investing in the roll-out of new 
3.5 tonne and 5 tonne delivery vehicles 
which have much greater fuel efficiency 
than our traditional fleet. Our new 3.5 
tonne and 5 tonne vehicles respectively 
produce 15kg and 23kg fewer CO
2
 
emissions than their predecessors (per 
100 miles travelled). The vehicles are also 
smaller, quieter and easier to manoeuvre. 
Our investment in the delivery fleet 
complements our stake in Gnewt Cargo 
Limited, the zero emissions logistics 
operator with the world’s largest electric 
vehicle fleet.
Our private business-to-business 
network, DX Exchange, continues 
to provide a viable low carbon 
alternative to collection mail services 
by facilitating and encouraging local 
footfall to approximately 4,500 
exchanges conveniently located 
throughout the UK and Ireland, 
so connecting 25,000 customers.
DX continues to complete route reviews 
and apply route optimisation strategies 
to reduce travel mileage. We also deploy 
vehicle telematics to provide real time 
performance monitoring.
Our driver assessors, introduced in 2015, 
actively engage our drivers in efficient 
driving techniques and this has already 
resulted in improved driving behaviour.
We have also introduced a new tyre 
management programme to help to 
ensure optimal vehicle efficiency and, 
where we can, we will choose to use 
remoulded tyres.
2013 2014 % change 2015 % change 2016 % change
CO
2
 emissions 
(tonnes) 44,869 38,259 –15% 35,692 –7% 32,346 –9%
1 The Document Exchange at Chancery Lane, 
London
2 Safe handling of IDW freight
3 Zero-emissions electric vehicle 19
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
HEALTH AND SAFETY 
We firmly believe that successful 
health and safety is about recognising 
our own people as internal customers 
and providing practical support 
and advice. Our focus is to minimise 
legal complexities to empower and 
engage our colleagues to focus 
on reducing operational risks. 
To achieve this, we refreshed all our 
safety processes in 2015/2016. This 
included the introduction of: a new 
simple accident-reporting process; 
a new Manager Guide to Safety 
Standards; and a new Colleague Safety 
Handbook. We also refreshed our online 
management system and created and 
introduced a new training programme 
for colleagues, which is delivered each 
month. This training programme aims 
to embed our safety standards and is 
used to engage all managers, safety 
representatives and team leaders.
A new ‘Risk Review’ process was also 
launched during the year. This is an audit 
programme designed to review risk 
assessments and benchmark performance 
across our network. Our safety strategy  
is underpinned by a systematic approach 
to continual improvement, using the 
framework of the OHSAS 18001 Safety 
Management System.
We continue to see consistent reductions 
in the overall numbers of accidents 
reported. Over the course of the financial 
year, we saw a 21% reduction in the total 
number of accidents, which compared to 
our target of a 10% decrease. 
H&S improvement 
targets Target Actual
Reduction in 
number of 
incidents –10% –21%
Our ongoing aim is to see further 
reductions of accidents and to improve 
safety standards for our colleagues 
through the deployment of our new 
processes and training. Our investment in 
our ‘OneDX’ programme will also help to 
support our health and safety strategies.
CASE STUDY
ACTION 
MEDICAL 
RESEARCH 
Action Medical 
Research raises vital 
funds to support 
medical research, 
aiming to beat the 
diseases that devastate 
the lives of so many of 
our children.
TOBY TENNANT
Head of Relationship Fundraising at 
Action Medical Research
“We are very proud to be among the 
three charities DX is supporting over the 
next 12 months. There are hundreds of 
thousands of children in the UK whose 
lives are devastated by disease and 
disability. It’s too many. Far too many. 
We need support to fund vital research 
to develop new treatments and cures for 
sick babies and children which is why the 
support of DX staff is so important.”
DX’S NEW CHARITY 20
ANNUAL REPORT AND ACCOUNTS 2016
CORPORATE RESPONSIBILITY CONTINUED
ROAD SAFETY
DX is committed to the highest 
standards of road safety and has created 
a Transport Management Board which 
consists of the Executive Team and 
Operating Centre licence holders. The 
Board meets on a regular basis to discuss 
and review road safety. We also work 
with The Royal Society for the Prevention 
of Accidents to deliver training and 
qualifications to our driver trainers. We 
have initiated the installation of state-of-
the-art cameras in our 7.5 tonne and new 
5 tonne vehicles in the freight operation. 
The roll out will continue throughout the 
fleet as vehicles are replaced. We believe 
these cameras will help to reduce 
incidents and improve safety. 
CUSTOMER SERVICE
Customer service is a key focus area for 
DX. Our ‘OneDX’ programme brings 
additional benefits as we roll out new 
software to improve customer services 
and operational delivery. Our new 
telephony and contact management 
system will greatly improve the customer 
experience and allow DX to better handle 
contacts across the whole DX estate. 
Additional training has also been 
provided across our service centres to 
enhance customer experience. 
COMMUNITY 
We recognise that as an organisation 
we have ‘touch points’ with many 
communities across the UK and Ireland 
and, as a responsible business with a large 
workforce, we aim to contribute as a 
member of the wider community.
Over the year we have continued to 
work closely with local communities 
to promote awareness of the job 
opportunities we offer, particularly during 
site changes. Working with Job Centre 
Plus, we have also been able to help 
colleagues find new employment where 
DX has closed sites and been unable 
to transfer the personnel or where a 
potential transfer has not been suitable. 
We are proud to maintain our Armed 
Forces Covenant with the Ministry of 
Defence through our involvement with 
the Hire a Hero charity. Hire a Hero 
supports former armed service personnel 
as they transition into civilian life and the 
promotion of employment opportunities 
at DX to former services personnel 
remains an important part of the Group’s 
recruitment policies. 
CASE STUDY
BATTLE 
BATTEN
The parents of Freddie 
and Louie launched the 
Battle Batten campaign 
to raise funds for 
research into the cruel 
CLN5 Batten disease, 
which has devastated 
the lives of their twin 
boys and for which 
there is currently 
no cure. 
SARAH DAWKINS 
Co-Founder at Battle Batten
“We are overwhelmed not only to be 
nominated, but to be chosen as one 
of DX’s charities this year. This support 
has given us a much needed boost 
in confidence as we have only been 
fundraising as a family for just over two 
years. So far, we have privately funded 
two research projects into Batten 
disease CLN5 to try to help our twin 
sons Freddie and Louie, but this vital 
research needs to continue. Batten 
disease is always fatal, there is no 
treatment or cure. Without research 
we have no hope to find therapies that 
could help children affected by this 
awful disease.”
DX’S NEW CHARITY 21
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
CHARITY GIVING
Over the last three years DX has 
supported Scotty’s Little Soldiers, a 
charity dedicated to supporting the 
children of men and women killed in 
action while serving with the British 
Armed Forces. Through staff fundraising 
activities and DX contributions, we have 
raised in excess of £130,000 during our 
partnership. We are now hoping to 
achieve similar success for other charities 
and, meanwhile, we will maintain our ties 
with Scotty’s Little Soldiers by continuing 
to send the charity’s mail and goody 
bags to the children they support free 
of charge. 
In searching for a new charity, DX asked 
colleagues for nominations and, after 
an extensive and emotional process, 
three charities were chosen: Action 
Medical Research, Battle Batten and 
CLIC Sargent. We are delighted to be 
supporting these charities and look 
forward to our fundraising efforts. We 
are also pleased to be continuing DX 
Ireland’s support of St. Ultans Community 
Care Project in Dublin, which looks after 
severely disadvantaged children. In the 
year to 30 June 2016 we raised €10,200 
for the charity’s high quality programmes 
in the Cherry Orchard area of Dublin. 
Over the financial year, we were also 
pleased to support the charitable efforts 
of our customers and suppliers through 
donations or gifts in aid of their chosen 
charities.
CASE STUDY
CLIC 
SARGENT 
The largest of the  
three chosen charities, 
CLIC Sargent, provides 
vital support to young 
cancer patients and 
their families, taking 
their knowledge and 
experience to service 
providers and policy 
makers, to help change 
things for the better.
NICHOLA DORAN
Regional Fundraising Manager  
at CLIC Sargent
“We are delighted DX has chosen to 
support our work. Its support will make 
a real difference to the lives of young 
people with cancer. Thanks to DX’s 
backing, CLIC Sargent’s dedicated team 
of nurses, social workers and other vital 
services will be able to support even 
more children, young people and their 
families through the hardest of times.”
DX’S NEW CHARITY 22
ANNUAL REPORT AND ACCOUNTS 2016
The Board recognises that the risks faced by the 
Group change and it regularly assesses risks in order 
to manage and mitigate any impact. 
The Board has identified the following risks as the 
primary risks to the Group’s successful performance:
PRINCIPAL RISKS AND UNCERTAINTIES
The market for letters is in structural decline and if the 
decline of letter volumes in the UK is at a faster rate 
than forecast or the growth in parcel volumes are lower 
than DX forecasts (or DX fails to maintain or increase its 
share of the parcel markets in which it operates), there 
may be a material adverse effect on DX’s operations 
and future financial condition. Low levels of economic 
growth may also affect the business of DX, including 
customers adopting cheaper service options for the 
transmission of letters and parcels.
The parcels market is highly competitive and DX may 
be adversely affected by aggressive pricing strategies. 
DX faces risks associated with the expansion of ‘click 
and collect’ in the UK parcel market and the increasing 
use of ‘pick up/drop off’ points in high street shops and 
other locations, which may lead to a reduction in parcel 
volume delivered by DX.
HMPO is a major customer, with DX’s Mail and packet 
operations exclusively providing the national delivery 
of all UK passports. Last year, the contract term was 
extended by a year to July 2016 and it is now in a 
competitive tender process. Failure to retain this 
contract would result in a significant loss of revenue.
DX seeks to win business in new 
sectors and develop new services, 
recognising the general move to digital 
and electronic alternatives. The Group 
is also benefiting from the benefits of 
its ‘OneDX’ programme. 
DX seeks to provide high levels of 
customer service at prices that offer 
customers best value. It also seeks to 
maintain strong relationships with major 
customers and develop new services, 
such as DX Parcel Exchange, in response 
to customer needs. The Group offers a 
broad range of services within the 
parcels market and is seeking to increase 
its penetration within these sub-sectors.
DX’s record of performance in executing 
this contract is strong. Management 
believes that DX has submitted a 
compelling tender offer at a competitive 
price, which offers a market-leading 
level of security. If the tender is 
unsuccessful, additional business would 
be required to fill the volume gap. 
RISK IMPACT MITIGATION 
LETTER 
AND PARCEL 
VOLUMES IN 
THE UK
THE PARCEL 
MARKET IN 
WHICH DX 
OPERATES 
IS HIGHLY 
COMPETITIVE
HER MAJESTY’S 
PASSPORT 
OFFICE 
(“HMPO”) 
CONTRACT 
RENEWAL 23
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
Any material failure in DX’s IT applications, systems 
and infrastructure may lead to operational and 
systems disruptions, with an adverse effect on DX’s 
operations, financial condition and future prospects. 
While its software is being updated, DX’s operational 
effectiveness could be impaired if its existing bespoke 
software failed.
DX uses a large number of consultants, individual 
sub-contractors and agency workers. In the event 
of any legal claim as to worker status, DX could be 
liable for increased costs (such as National Insurance 
contributions) and liabilities (such as employee rights), 
which could have an adverse effect on its financial 
condition.
DX has a business continuity plan in the 
event of IT systems failure and further 
investment is being made to enhance 
capability. Further protections are in 
place to defend DX’s systems against 
attacks. These protections are to 
a level acceptable to government 
departments. Prior to new systems 
going live, DX conducts significant 
testing in non-live environments. 
DX puts appropriate contractual and 
operational arrangements in place. 
DX continues to monitor cases to 
ensure that it maintains compliance 
with legislation.
RISK IMPACT MITIGATION 
By order of the Board
PETAR CVETKOVIC
CHIEF EXECUTIVE OFFICER
5 OCTOBER 2016
IT SYSTEMS ARE 
CRITICAL TO 
DX’S BUSINESS 
OPERATIONS
CERTAIN DX 
CONSULTANTS 
AND AGENCY 
WORKERS 
COULD BE 
DEEMED TO 
BE EMPLOYEES 
OF DX 24
ANNUAL REPORT AND ACCOUNTS 2016
BOARD OF DIRECTORS
BOB HOLT
 1,2,3
NON-EXECUTIVE CHAIRMAN
PETAR CVETKOVIC
3
CHIEF EXECUTIVE OFFICER
Bob joined DX as a Non-executive Director, before 
becoming Chairman in 2014. He is also chairman of 
Mears Group PLC, the support services group 
focused on social housing and domiciliary care services, 
having overseen the company’s admission to AIM and 
subsequent listing on the Main Market of the London 
Stock Exchange. He is also non-executive chairman 
of Totally Plc and is a director of a number of other 
businesses. On 21 July 2016, Bob was appointed as 
executive chairman of Lakehouse plc, the asset and 
energy support services group.
Petar has 33 years’ experience in the transport and 
logistics industry, the last six of which have been 
with DX as Chief Executive Officer. Prior to joining DX, 
Petar was chief executive officer of Target Express, 
managing director of City Link and UK managing 
director of Norbert Dentressangle.
IAN PAIN
CHIEF FINANCIAL OFFICER
PAUL MURRAY 
1,2,3
NON-EXECUTIVE DIRECTOR
Ian has 17 years’ experience as a chief financial officer, the 
last nine of which have been with DX. He was previously 
chief financial officer of an international manufacturer of 
specialist labels for the agrochemical and pharmaceutical 
industries. After qualifying as a chartered accountant with 
Price Waterhouse, Ian worked in corporate finance at 
Charterhouse Bank before joining the private equity arm 
of The Prudential as an investment director. As reported 
on 14 July 2016, Ian has decided to step down from his role 
and the Board to pursue new opportunities but will remain 
with the Group until the end of October 2016 in order to 
ensure an orderly handover to Daljit Basi, Finance Director, 
who was promoted to the Board on 21 September 2016.
Paul joined DX as a Non-executive Director in 2014 
and has over 25 years’ senior level experience in 
the transport and logistics industry. Latterly he was 
chairman of NetExpress Europe, the pan-European 
road express specialist which links leading companies 
in express, freight and logistics and, before that, was 
chief executive of Target Express Parcels Limited, the 
national express parcels and freight provider, for eight 
years and managing director of the UK and Ireland 
operations of Federal Express for over ten years. He 
also chaired a healthcare business and was a director 
of a fast-growing marketing logistics business.
1 Audit Committee
2 Nomination Committee
3 Remuneration Committee 25
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
CHAIRMAN’S INTRODUCTION  
TO CORPORATE GOVERNANCE
The Board strives to uphold and achieve 
high standards of corporate governance, 
integrity and business ethics.
DEAR SHAREHOLDER,
PRINCIPLES OF CORPORATE GOVERNANCE
As Chairman, I lead DX’s Board of Directors and a key 
responsibility of mine is to ensure that we strive to uphold and 
achieve high standards of corporate governance while at the 
same time building and maintaining a sustainable business that 
creates long-term shareholder value. It is also my responsibility 
to ensure that the Board continually reviews its strategic goals 
and the progress made towards achieving those goals.
There is a clear distinction between the responsibilities of the 
Board of Directors and those of the DX Executive Team. Petar 
Cvetkovic, Chief Executive Officer, leads the DX Executive Team 
and the Board is under my leadership. The Board acts on behalf 
of shareholders in constructively reviewing and challenging the 
Company’s performance and the implementation of strategy, 
with an emphasis on accountability to shareholders. I therefore 
encourage openness and constructive discussion in all 
Board meetings.
BOB HOLT
CHAIRMAN
DX GROUP REPORTING STRUCTURE
AUDIT 
 COMMITTEE
EXECUTIVE  
TEAM
REMUNERATION 
COMMITTEE
NOMINATION 
COMMITTEE
DX (GROUP) PLC
BOARD OF DIRECTORS
SENIOR 
MANAGEMENT
Both the Board and the Executive Team value integrity, 
transparency and fairness and seek to uphold these values 
within DX and in our dealings with our customers and suppliers. 
Reflecting this, we recently introduced a new supplier code 
of conduct which sets out the minimum standards that DX 
suppliers and business partners should meet.
We also seek to comply with the Quoted Companies Alliance 
corporate governance code (“the QCA Code”). While DX is not 
required to comply with the UK Corporate Governance Code, 
since it is not listed on the Main Market, the Board recognises 
the importance of the principles set out in the UK Corporate 
Governance Code. It therefore seeks to apply them as far as 
the Board considers it appropriate for a company of DX’s size 
and nature. The Board believes that this approach helps to 
provide DX with a firm foundation for successful growth. 
I remain confident that the composition of DX’s Board reflects 
an appropriate blend of experience and backgrounds, and that 
the Board is able to provide an independent and objective view 
of the Company’s performance against its strategic objectives 
and future goals.
BOB HOLT
CHAIRMAN
  26
ANNUAL REPORT AND ACCOUNTS 2016
The Board is responsible for ensuring the highest standards of 
corporate governance at DX and for promoting the long-term 
success of DX.
THE BOARD
The roles of the Chairman and Chief Executive Officer are 
separate with each having clearly defined duties and 
responsibilities.
The Chairman provides leadership to the Board. He is 
responsible for chairing the Board meetings and for setting the 
agenda for the Board meetings (in consultation with the Chief 
Executive Officer) and ensuring that the Board has sufficient 
time to discuss issues on the agenda, especially those relating to 
strategy. The Chairman is also responsible for ensuring that the 
Directors receive all of the necessary information and reports. 
The Chief Executive Officer is responsible for leadership of the 
DX management and its employees on a day-to-day basis. In 
conjunction with the Executive Team, he is responsible for the 
execution of strategy approved by the Board and the 
implementation of Board decisions. He is also responsible for 
ensuring the market and regulators are kept appraised in a 
timely manner of any material events and developments, and 
that the appropriate standards of corporate governance are 
effectively communicated and adhered to throughout the 
business.
The Board comprises the Non-executive Chairman, Bob Holt, 
two Executive Directors, Petar Cvetkovic (Chief Executive 
Officer) and Ian Pain (Chief Financial Officer) and one Non-
executive Director, Paul Murray. The Non-executive Directors 
constructively challenge and help to develop DX’s strategic 
priorities. 
Details of each Director’s background and experience can be 
found on page 24. The Board’s mix of skills and business 
experience ensures an informed review and debate of 
performance and strategy. 
The Board will regularly consider whether it is appropriate to 
appoint an additional Non-executive Director to further support 
the Board.
INDEPENDENCE
The actions and decisions of all the Non-executive Directors 
who served during the year and up to the date of this report are 
considered by the Board to be independent in both character 
and judgement. 
ROLE OF THE BOARD
The Board meets regularly to review DX’s strategy and to ensure 
that this is aligned with creating sustainable shareholder value. 
Directors are supplied with a comprehensive Board pack before 
all Board meetings which includes the agenda, previous minutes, 
detailed financial information and all other supporting papers 
necessary to make a fully informed discussion. The Board 
ensures that the necessary resources are in place to achieve 
DX’s strategic priorities. The key responsibilities of the Board (as 
set out in the schedule of matters reserved for the Board) are:
• overall leadership and management of DX; 
• setting DX’s values and standards, long-term objectives, 
commercial strategy and strategic direction;
GOVERNANCE REPORT
• review and approval of DX’s annual operating and capital 
expenditure budgets; 
• oversight of DX’s operations and compliance;
• ensuring sound management and maintenance of an 
appropriate system of internal control and risk management; 
• approval of any extension of DX’s activities into new business 
or geographic areas; 
• approval of major investments or capital projects;
• decisions to cease to operate or dispose of any material part 
of DX’s business;
• changes to the Group’s financial, capital or corporate 
structure;
• approval of the financial statements, Annual Report and 
Accounts, material contracts and contracts not in the 
ordinary course of business;
• approval of dividend objective and dividend payments;
• communications with shareholders and the market;
• Board membership and composition of Board Committees; 
• corporate governance and remuneration policy (including 
employee benefits); and
• any decision likely to have a material impact on DX from any 
perspective, including, but not limited to, financial, 
operational, strategic or reputational.
A full copy of the schedule of matters reserved for the Board is 
available on www.dxdelivery.com.
Day-to-day operational and financial management is delegated 
to DX’s Executive Team (which includes both Executive 
Directors). The Executive Team also meets monthly and 
provides the Board with detailed monthly reports. 
OPERATION OF THE BOARD
The Board meets monthly and there were 12 scheduled Board 
meetings during the financial year. Any specific actions arising 
during meetings agreed by the Board are followed up and 
reviewed at subsequent Board meetings to ensure their 
completion. The Board also keeps in close contact between 
formal meetings and will conduct ad hoc meetings as required. 
If a Director is unable to attend a Board meeting, the Chairman 
will canvass his views in advance and ensure that the Director is 
promptly advised of the outcome of the matters under 
discussion.
Attendance 
Scheduled 
Board 
meetings
Audit 
Committee
Remuneration 
Committee
Nomination 
Committee
Bob Holt 9/12 2/2 2/2 No 
meetings
Paul Murray 11/12 2/2 2/2 No 
meetings
Petar Cvetkovic 12/12 n/a 2/2 n/a
Ian Pain 12/12 n/a n/a n/a
Each Director receives induction training on appointment 
including visits to principal sites and meetings with operational 
management, and all Directors have access to independent legal 
advice on request.
All Directors act in what they consider to be the best interests of 
the Company, consistent with their statutory duties. 27
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
In recognition of its importance, the first standing item of 
business at every scheduled Board meeting is the consideration 
of the health and safety report. Other regular reports include 
those from the Chief Executive Officer and Chief Financial 
Officer covering business performance, markets and 
competition, investor and analyst updates as well as progress 
against strategic objectives and capital expenditure projects. 
Board meetings are frequently held at different Group locations 
in order to review local operations.
BOARD COMMITTEES
The Board has delegated certain responsibilities to the Audit 
Committee, the Remuneration Committee and the Nomination 
Committee. Each Committee operates according to its own 
terms of reference (available on www.dxdelivery.com).
The Audit Committee has primary responsibility for 
monitoring the quality of internal controls, ensuring that the 
financial performance of DX is properly measured, ensuring 
the integrity of the financial statements, and reporting and 
reviewing reports from DX’s auditor relating to DX accounting 
and internal controls, in all cases having due regard to the 
interests of shareholders. The Remuneration Committee 
determines remuneration for the Executive Directors and the 
Executive Team. The Nomination Committee recommends the 
appointment of Directors and is responsible for succession 
planning. Further information on each Committee is set 
out in the relevant report on the following pages.
INVESTOR RELATIONS
DX places a great deal of importance on communication 
with all shareholders. There is regular dialogue with individual 
institutional shareholders throughout the year and formal 
presentations after the interim and preliminary results. 
DX has arranged a number of site visits for shareholders and 
other City commentators with the aim of providing them with 
increased exposure to DX operations and management. 
The 2016 Annual General Meeting (“AGM”) will be held on 
6 December at 8.30am. The notice of the meeting is enclosed. It is 
also available to download from www.dxdelivery.com.
The Board encourages dialogue between the Directors and 
investors and the Directors are available at each AGM to hear 
the views of shareholders and to answer any questions about 
the business generally and about the resolutions proposed. 
The principal methods of communication with private 
investors remain the Annual Report and Accounts, the interim 
statements and DX’s website (www.dxdelivery.com). The 
website, which includes a DX Investor Centre, is viewed as an 
efficient and cost-effective way to communicate widely with 
all shareholders and DX’s financial reports, publications and 
press releases can be viewed here together with corporate 
governance information, key dates in the financial year, and 
news about DX, its services and issues affecting the industry.
The Board also receives a regular summary of shareholder 
feedback from Zeus Capital (DX’s Nominated Adviser and Broker 
during the financial year) and Numis Securities, joint Broker. 
  28
ANNUAL REPORT AND ACCOUNTS 2016
AUDIT COMMITTEE REPORT
The members of the Audit Committee are the two independent 
Non-executive Directors, Bob Holt and Paul Murray. The 
Board is confident that the collective experience of the 
Audit Committee members enables them, as a group, to act 
as an effective Committee. Attendance at meetings of the 
Audit Committee by non-members is by invitation and at 
the discretion of the Audit Committee. The Chief Executive 
Officer, the Chief Financial Officer and the KPMG LLP audit 
engagement partner (DX’s external auditor) will normally 
be invited to attend meetings of the Audit Committee. The 
Chairman of the Audit Committee meets regularly with 
the Chief Financial Officer and the external auditor.
The main duties of the Audit Committee are set out in its terms 
of reference and include the following:
• to monitor the integrity of the financial statements of the 
Group, including its annual and half-year reports and any 
other formal announcement relating to DX’s financial 
performance;
• reviewing and reporting to the Board on any significant 
financial reporting issues and judgements which the financial 
statements contain having regard to matters communicated 
to it by the auditor;
• to review and challenge where necessary:
 – the consistency of, and any changes to, significant 
accounting policies both on a year-on-year basis and 
across the Group; 
 – whether DX has followed appropriate accounting 
standards and made appropriate estimates and 
judgements, taking into account the views of the 
external auditor;
 – the clarity and completeness of disclosure in the financial 
reports; and
 – all material information presented with the financial 
statements;
• to keep under review the adequacy and effectiveness of 
DX’s internal financial controls and internal control and risk 
management systems;
• to review and approve the content of the Annual Report and 
Accounts and advise the Board on whether, taken as a whole, 
it is fair, balanced and understandable and provides the 
information necessary for shareholders to assess DX’s 
performance, business model and strategy;
• to review the adequacy of DX’s compliance, whistleblowing, 
controls for the prevention of bribery and procedures for 
detecting fraud;
• to regularly assess the need for an internal audit function;
• to consider and make recommendations to the Board, to 
be put to shareholders for approval at the AGM, in relation 
to the appointment, reappointment and removal of DX’s 
external auditor;
• to oversee the relationship with the external auditor, 
including recommendations on their remuneration, approval 
of their terms of engagement, annual assessment of their 
independence and objectivity taking into account relevant 
UK professional and regulatory requirements, and the 
relationship with the auditor as a whole, including the 
provision of any non-audit services;
• to meet regularly with the external auditor and at least once 
a year, without management being present, to discuss the 
auditor’s remit and any issues arising from the audit; and
• to review and approve the audit plan and review the findings 
of the audit.
During the year to 30 June 2016, the Audit Committee reviewed 
and endorsed the 2015 Annual Report and Accounts, the 
half-year financial statements and results announcements, 
considered the proposed level of dividends to be paid, ahead 
of their approval by the Board, and reviewed and commented 
on the Company’s risk register and mitigation procedures. 
EXTERNAL AUDITOR
To ensure the auditor’s independence and objectivity, the 
Audit Committee annually reviews DX’s relationship with the 
auditor. Following the review in 2016, DX concluded that it 
has an objective and professional relationship with KPMG 
LLP and that there are sufficient controls and processes 
in place to ensure the required level of independence. 
In addition, the auditor is required to review and confirm its 
independence to the Audit Committee on a regular basis.
Having reviewed the auditor’s independence and performance, 
the Audit Committee is recommending that KPMG LLP be 
reappointed as DX’s auditor at the next AGM.
AUDIT PROCESS
KPMG LLP prepare an audit plan which sets out the scope of 
and approach to the audit, significant risks and other areas to 
be targeted. This plan is reviewed and agreed in advance by the 
Audit Committee. Following their review, the auditor presents 
their findings to the Audit Committee for discussion. No major 
areas of concern were highlighted by the auditor during the year.
NON-AUDIT SERVICES
KPMG LLP may also be employed where, as a result of its 
position as auditor, it either must, or is best placed to, perform 
the work in question. A policy is in place in relation to the 
provision of non-audit services by the auditor to ensure that 
there is adequate protection of its independence and objectivity. 29
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
NOMINATION COMMITTEE REPORT
The members of the Nomination Committee during the year 
were the two independent Non-executive Directors, Paul Murray 
(Chair except when the matters under consideration related to 
his position) and Bob Holt. The Committee meets according to 
DX’s requirements.
The responsibilities of the Committee are set out in its terms of 
reference and include:
• reviewing the structure and composition of the Board 
(including the skills, knowledge, experience and diversity); 
• recommendations to the Board with regard to any changes 
and new appointments taking into account the challenges 
and opportunities facing DX, and the skills and expertise 
needed on the Board in the future;
• requiring that any proposed Director discloses any other 
business interests that may result in a conflict of interest and 
reports any future business interests that could result in a 
conflict of interest;
• succession planning for both Executive and Non-executive 
Directors and in particular for the key roles of Chairman, Chief 
Executive Officer and the Executive Team;
• the reappointment of any Non-executive Director at the 
conclusion of their specified term of office having given due 
regard to their performance and ability to continue to 
contribute to the Board in the light of knowledge, skills and 
experience required;
• the re-election of Directors by shareholders under the annual 
re-election provisions of the QCA Code or the retirement by 
rotation provisions in DX’s Articles of Association (“Articles”);
• ensuring that on appointment to the Board, Non-executive 
Directors receive a formal letter of appointment setting out 
clearly what is expected of them in terms of time 
commitment, Board Committee service and involvement 
outside Board meetings; and
• membership of the Audit and Remuneration Board 
Committees. 30
ANNUAL REPORT AND ACCOUNTS 2016
DIRECTORS’ REMUNERATION REPORT
(INCLUDING THE REMUNERATION COMMITTEE REPORT)
CHAIRMAN’S ANNUAL STATEMENT 
DEAR SHAREHOLDER,
DX adopts a simple and clear approach to remuneration. Our 
policy is to attract and retain the best possible people who have 
the capability and drive to meet the Company’s strategic and 
financial objectives. Accordingly, we offer our Executive 
Directors a basic salary that is fair and reasonable in comparison 
with companies of a similar size in similar industries and reflects 
each individual’s experience and contribution to the Company. 
We incentivise the Executive Directors to drive strategy 
year-on-year by rewarding the achievement of the annual 
targets set by the Committee through an annual cash bonus 
scheme. The performance targets are linked to EBITDA growth 
and other KPIs including customer service levels. We believe 
that this effectively incentivises the Executive Team to create 
and protect shareholder value. Long-term performance related 
remuneration is achieved through participation in the Value 
Creation Plan (“VCP”) (detailed below) which is closely aligned 
with the interests of shareholders.
As referred to earlier in this report, this year has been a 
challenging year for the business and for the logistics sector as a 
whole. Accordingly, the Committee has decided that there will be 
no increase in executive pay. In addition, despite hard work and 
dedication, the Company’s overall performance in the financial 
year has failed to reach the necessary triggers and, as a result, no 
annual cash bonus is being paid to the Executive Directors.
PAUL MURRAY
CHAIRMAN OF THE REMUNERATION 
COMMITTEE
REPORT FROM THE REMUNERATION COMMITTEE 
The Board has delegated certain responsibilities for executive 
remuneration to the Remuneration Committee. 
The Remuneration Committee is chaired by Paul Murray. 
Bob Holt and Petar Cvetkovic are its other members. 
Any other attendees are at the invitation of the Committee 
Chairman only and will usually include the Chief People 
Officer. The Remuneration Committee meets according to 
DX’s requirements. There were two meetings held in the 
financial year. The Remuneration Committee determines the 
remuneration packages for the Chairman, the Executive 
Directors and the Executive Team and any major remuneration 
plans for the Group. This includes implementation of the Group’s 
share incentive plans. The Committee’s role is to ensure that the 
principles of the Company’s remuneration policy are aligned with 
the business strategy and promote long-term shareholder value. 
Full terms of reference for the Committee are available on  
www.dxdelivery.com.
The Committee also receives advice and assistance from the 
Chief People Officer, the people team and its external legal and 
tax advisers.
The main items of business considered by the Remuneration 
Committee during the financial year included reviews of:
• remuneration strategy and policy;
• salary for Executive Directors and the Executive Team; and
• annual bonus payments.
There were no changes to the Directors’ remuneration in the 
financial year and no change to DX’s remuneration policy is 
anticipated in the coming financial year. 31
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
EXECUTIVE DIRECTORS’ SERVICE CONTRACTS AND 
TERMINATION POLICY
Each of the Executive Directors has a service agreement with 
DX Network Services Limited with an indefinite term and a 
fixed maximum termination period of 12 months. Any payments 
in respect of termination reflect base salary only and do not 
include annual bonus. The Company’s policy on the setting 
of notice periods under the Executive Directors’ service 
agreements is considered to be in line with external market 
trends and is reviewed by role to protect the Company’s 
knowledge and operations. 
The base annual salaries for the Executive Directors for the year 
to 30 June 2017 will be as follows:
2017
£000
2016
£000
% 
change
Petar Cvetkovic (Chief 
Executive Officer)
1
500 375
1
nil
1
Ian Pain (Chief Financial 
Officer) 320
2
320 nil
1 Further to the trading update announced on 13 November 2015, Petar 
Cvetkovic volunteered a 50% pay reduction in respect of the second half of 
the financial year.
2 Annual salary until stepping down from his role at the end of October 2016.
The Company does not provide a pension for the Executive 
Directors.
Each of the Executive Directors is eligible to participate in 
a discretionary annual bonus scheme, with the potential to 
receive bonus payments up to a maximum of 100% of salary. 
Any bonus payments are at the discretion of the Remuneration 
Committee and subject to such conditions, including EBITDA 
and/or KPI targets (such as service levels) as the Committee 
may determine. Bonuses are currently based on personal 
performance and achievement of the Group’s strategic 
objectives and financial targets, and are made in line with the 
scheme rules which apply equally to all colleagues regardless 
of level. No bonuses will be paid to the Executive Directors 
in respect of this financial year. Only the Remuneration 
Committee can authorise executive termination payments.
NON-EXECUTIVE DIRECTORS
Non-executive Directors have letters of appointment each with a 
term of three years (subject to re-election at the AGM) and a 
fixed maximum termination period of three months. 
The annual salaries/fees for the Non-executive Directors for the 
year to 30 June 2017 will be as follows:
2017
£000
2016
£000
% 
change
Bob Holt 90 90 nil
Paul Murray 40 40 nil
Pay for all other employees is based upon external market 
rates, job role, internal comparators and business impact. 
Both DX’s financial and operational performance, and each 
person’s personal performance are also taken into account 
when setting salaries; DX does not reward poor performance. 
PERFORMANCE EVALUATION
DX has not undertaken a formal evaluation of the Board or 
its Committees in this financial year. The existing approach 
is unlikely to change but the Remuneration Committee is 
keen to ensure that the reward strategy remains closely 
aligned with the DX business strategy as it evolves. The 
performance of the Executive Directors is reviewed annually 
in accordance with DX’s personal performance plan system. 
DIRECTORS’ SHAREHOLDINGS 
Petar Cvetkovic, Chief Executive Officer, and Lucy Woodall, 
wife of Ian Pain, Chief Financial Officer, purchased additional 
£0.01 Ordinary Shares in the capital of the Company on 9 March 
2016. The Directors who held office at 30 June 2016 had the 
following interests, including family interests, in the shares of the 
Company (excluding any entitlements that may become due 
under the VCP):
Ordinary 
Shares 
30 June 2016
Petar Cvetkovic 5,529,593
Ian Pain 2,427,001
Bob Holt 100,000
Paul Murray nil
The market price of Ordinary Shares on 30 June 2016 was £0.16 
and the range during the period from 1 July 2015 to 30 June 
2016 was from £0.14 to £0.94. 32
ANNUAL REPORT AND ACCOUNTS 2016
TOTAL SINGLE FIGURE OF REMUNERATION FOR DIRECTORS (AUDITED)
The table below sets out a single figure for the total remuneration received by each Director for the year ended 30 June 2016 and the 
prior year.
Executive Directors Non-executive Directors
Petar Cvetkovic Ian Pain Bob Holt Paul Murray
2016
£000
2015
£000
2016
£000
2015
£000
2016
£000
2015
£000
2016
£000
2015
£000
Base salary/fee 375 500 320 320 90 88 40 37
Benefits – – – – – – – –
Annual bonus scheme – – – – n/a n/a n/a n/a
Long-term incentive 
plan
1
– – – – n/a n/a n/a n/a
Pension benefits – – – – n/a n/a n/a n/a
Total 375 500 320 320 90 88 40 37
1 Long-term performance related remuneration is achieved through participation in the VCP (see below).
The table below sets out the maximum bonus potential (100% of base salary) for each Director for the year ended 30 June 2016 and 
the prior year.
Executive Directors Non-executive Directors
Petar Cvetkovic Ian Pain Bob Holt Paul Murray
2016
£000
2015
£000
2016
£000
2015
£000
2016
£000
2015
£000
2016
£000
2015
£000
Maximum bonus 
potential
1
500 500 320 320 n/a n/a n/a n/a
1 The Company’s overall performance in the financial year failed to reach the necessary triggers and, as a result, no annual cash bonus is being paid.
DIRECTORS’ INTERESTS IN ALL SHARE PLANS (EXCLUDING VCP) 
No Directors held options under the Company’s CSOP and SAYE schemes.
EXECUTIVE DIRECTORS’ EXTERNAL APPOINTMENTS
As at the date of this report, neither of the Executive Directors serves as a paid Director on any external board.
RELATIVE IMPORTANCE OF SPEND ON PAY
The following table shows the Company’s actual spend on pay (for all employees) relative to dividends and retained profit.
2016 
£m
2015 
£m Change
Staff costs £74.7 £77.5 –3.6%
Dividends £10.0 £8.0 25%
Profit before tax £9.4
1
£24.8 –62%
1 Excludes exceptional items.
SHARE PLANS
To further incentivise and support the retention of senior management (including the Executive Directors and the Executive Team) 
and therefore ultimately to enhance shareholder value, DX adopted three share plans on Admission. The share plans adopted by DX 
are made up of three incentive arrangements:
(1) the DX (Group) plc VCP, which will reward the Executive Team (including the Executive Directors) in the event that shareholder 
value is created; 
(2) the SAYE plan, which is an HMRC approved scheme under which options over Ordinary Shares were offered to all employees of 
DX who had been employed for the relevant qualifying period; and
(3) the CSOP, which is also an HMRC approved scheme, under which selected management were granted market value options over 
Ordinary Shares. The CSOP also has an unapproved schedule under which options were granted in excess of the HMRC 
approved scheme limit.
The Company has also established an employee benefit trust which holds some shares in the VCP. This is a discretionary trust and its 
aim is to reward long service in non-management level staff who remain with the Company for the qualifying period.
DIRECTORS’ REMUNERATION REPORT CONTINUED
(INCLUDING THE REMUNERATION COMMITTEE REPORT) 33
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
VALUE CREATION PLAN (“VCP”)
Under the VCP, A Ordinary Shares in DX (VCP) Limited 
(a subsidiary of the Company) were issued to the Executive 
Directors and the six other members of the Executive 
Team. The A Ordinary Shares were issued at nil cost and 
PAYE and National Insurance contributions have been 
accounted for on the value of these shares at acquisition.
The A ordinary shareholders are only entitled to realise any 
value from their A Ordinary Shares if pre-determined value 
hurdles are exceeded and after the expiry of minimum holding 
periods described below (referred to as ‘vesting period’). The 
value hurdles are detailed in the DX (VCP) Limited share rights 
and are linked to the market capitalisation of the Group. The 
A ordinary shareholders will, to the extent that the hurdle has 
been exceeded, be able to realise value by disposing of their 
A Ordinary Shares to the Company following publication of the 
Company’s financial results for the year ending 30 June 2017. 
The A ordinary shareholders also had the opportunity to dispose 
of 50% of their shares at an earlier date (on the publication of 
the results for the year ended 30 June 2016) but the ability to 
dispose at this earlier date is subject to the Company share price 
having hit a pre-determined target which was not achieved. 
The Company has the choice as to whether to settle the 
disposal in cash or by the issue of shares in the Company. The 
Company’s current intention is to issue shares in the Company.
Retaining ownership of the A Ordinary Shares is conditional on 
continuing employment. Specific rules will apply if the employee 
ceases employment during the vesting period.
The A Ordinary Shares have no dividend rights and very limited 
voting rights.
The Executive Directors also acquired B Ordinary Shares in DX 
(VCP) Limited. The B Ordinary Shares were acquired at market 
value. The B Ordinary Shares have limited economic rights but 
entitle each of the B shareholders to 5% of the voting rights in 
DX (VCP) Limited.
The Executive Directors’ shareholdings in DX (VCP) Limited at 
30 June 2016 are as follows:
Director
A Ordinary 
Shares of 
£0.01 each
B Ordinary 
Shares of 
£0.01 each
Petar Cvetkovic 34 500
Ian Pain 30 500
A Ordinary Shares in DX (VCP) Limited carry no voting rights; B 
Ordinary Shares entitle the holders to 10% of the voting rights in 
that company.
Further details of the scheme are provided above and in note 28 
to the financial statements.
LONG-TERM INCENTIVE PLANS AND SHARE OPTION 
AWARDS
COMPANY SHARE OPTION PLAN (“CSOP”)
On 26 February 2014, the Company approved a share option 
plan that entitles key management personnel and senior 
employees to purchase shares in the Company, further details 
of which are provided in note 28 to the financial statements. 
The plan entitled holders of vested options to purchase shares 
at the market price of the shares at the date of the grant. 
Subsequently, on 16 June 2016 all option holders were given 
the opportunity to opt out of the scheme on the basis that the 
options were very unlikely to come to fruition based on the share 
price at the time. The overwhelming majority of option holders 
supported this decision by deciding to opt out of the scheme.
SAYE SCHEME
The Company approved its SAYE scheme on 26 February 
2014, further details of which are provided in note 28 to 
the financial statements. Subsequently, on 17 June 2016 all 
option holders were given the opportunity to opt out of 
the scheme on the basis that the options were very unlikely 
to come to fruition based on the share price at the time. 
The overwhelming majority of option holders supported 
this decision by deciding to opt out of the scheme. 
PETAR CVETKOVIC
CHIEF EXECUTIVE OFFICER
5 OCTOBER 2016 34
ANNUAL REPORT AND ACCOUNTS 2016
DIRECTORS’ REPORT
The names and biographical details of the Directors currently 
serving on the Board are set out on page 24. All of the Directors 
served on the Board from the start of the financial year until the 
date of this report. 
The Company’s approach to the appointment and replacement 
of Directors is governed by its Articles (together with the 
relevant legislation) and takes into consideration any 
recommendations of the QCA Code.
The Company’s Articles require that all Directors should be 
subject to election by shareholders at the first AGM following 
their appointment and that one-third of the Directors (or the 
number nearest to but not less than one-third) retire by rotation 
at each AGM, with each Director also being subject to re-
election at intervals of not more than three years. At the first 
AGM of the Company in November 2014 all the current Directors 
of the Company offered themselves for election or re-election. 
The retirement by rotation provisions of the Articles will apply 
going forward. Accordingly, Ian Pain offered himself for re-
election at the 2015 AGM and Petar Cvetkovic offers himself  
for re-election at the 2016 AGM and the Board recommends  
to shareholders the re-election of Petar Cvetkovic who 
continues to demonstrate commitment to his role as Chief 
Executive Officer and whose individual performance  
continues to be effective.
The Board has the power to appoint additional Directors or to 
fill a casual vacancy amongst the Directors. Any Director so 
appointed by the Board holds office only until the next AGM and 
may then offer himself/herself for election by the shareholders.
The powers of the Directors are determined by the Articles, 
the Companies Act 2006 and other relevant legislation. At 
the 2015 AGM, the Directors were authorised to issue and allot 
shares and to disapply the statutory pre-emption rights. This 
authority remains in place until the conclusion of the 2016 AGM. 
It will be proposed at the 2016 AGM that the Directors will be 
granted a new authority to allot shares, to disapply the statutory 
pre-emption rights and the authority to buy back shares. 
The Company may by ordinary resolution declare dividends 
not exceeding the amount recommended by the Board.
RESULTS AND DIVIDENDS
The results for the year ended 30 June 2016 are shown on 
page 39. The Group’s loss for the year after tax was £84.4 million. 
The Directors recommend a final dividend of 1.5p per share be 
paid on 13 December 2016 to ordinary shareholders on the 
register of members at the close of business on 11 November 
2016. The ex-dividend date will be 10 November 2016.
PRINCIPAL ACTIVITIES, RISKS AND REVIEW OF 
THE BUSINESS
The Group’s continuing activities are the provision of parcels, mail 
and logistics services in the UK and Ireland. The principal activity 
of the Company is that of a holding company.
The Strategic Report set out on pages 1 to 23 provides a fair 
review of the Group’s business for the year ended 30 June 2016. 
It also explains the objectives and strategy of the Group, its 
competition and the markets in which it operates, the principal 
risks and uncertainties it faces, the Group’s financial position, 
key performance indicators and likely future developments of 
the business.
RISK MANAGEMENT AND INTERNAL CONTROL
DX has in place a system of internal financial controls 
commensurate with its current size and activities.
The Board has overall responsibility for DX’s system of internal 
control to safeguard the Company’s assets and shareholders’ 
investments. The risk management process and systems of 
internal controls are designed to identify the main risks that the 
Group is exposed to, and ensure that appropriate policies and 
procedures are in place to minimise these risks to the Group, 
including the establishment of appropriate business continuity 
planning arrangements. The Company maintains a risk 
management register which is managed by a Risk Management 
Committee and discussed every six months with the Executive 
Team and the Chairman of the Audit Committee.
The Board has reviewed the effectiveness of the system of 
internal control for the year ended 30 June 2016 and up to the 
date of the signing of the Annual Report and Accounts. The 
Board will continue to develop and implement internal control 
procedures appropriate to DX’s activities and scale.
The Board recognises that an essential part of its responsibility 
is the effective safeguarding of assets, the proper recognition of 
liabilities and the accurate reporting of results. The Group has a 
comprehensive system for regular reporting to the Board. This 
includes monthly management accounts and an annual planning 
and budgeting system. The financial reporting system compares 
against budget and prior year, and the Board reviews its 
financial year forecasts on a monthly basis.
The Board has established a formal policy of authorisation 
setting out matters which require its approval and certain 
authorities which are delegated to the Executive Directors.
GOING CONCERN
The Directors are satisfied that the Group has the appropriate 
capital structure to enable it to invest in facilities, equipment and 
staff as required, and to continue in operational existence for the 
foreseeable future. Thus they continue to adopt a going concern 
basis in preparing the financial statements.
Further details regarding the adoption of the going concern 
basis can be found in the basis of preparation of accounts in 
note 2 to the financial statements.
CORPORATE GOVERNANCE
The Board is fully committed to high standards of corporate 
governance. Details relating to the Company’s compliance with 
the QCA Code for the financial year and a description of the 
Company’s management and reporting structure are given in 
the Corporate Governance and Directors’ Remuneration 
Reports on pages 25 to 33.
ANTI-BRIBERY AND CORRUPTION
DX takes a zero-tolerance approach to bribery and corruption 
and has a formal anti-corruption and bribery policy in place. 
Training is provided to set the clear expectation that staff must 
act professionally and with integrity in all business dealings and 
colleagues are required to complete the gift register. 35
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
WHISTLEBLOWING
DX has whistleblowing procedures under which colleagues are 
encouraged to inform the Executive Team or any Director of any 
concerns they may have that the practices of DX or individuals 
are wrongful or contravene any applicable laws or regulations.
MODERN SLAVERY
DX has issued a modern slavery transparency statement 
for the current financial year which can be found on  
www.dxdelivery.com. DX has also introduced a supplier code 
of conduct requiring all suppliers and business partners to 
adhere to the Modern Slavery Act 2015 and to conduct business 
in accordance with the standards of conduct acceptable to DX.
CORPORATE RESPONSIBILITY
Information on corporate responsibility matters are set out on 
pages 18 to 21. These include disclosures on DX’s environmental 
policies (including details of the Group’s greenhouse gas 
emissions as required to be disclosed under the Companies Act 
2006) and health and safety policies. Further details can also be 
found on the DX website www.dxdelivery.com.
OUR COLLEAGUES
DX aims to create a culture where colleagues of all backgrounds 
and experience feel appreciated and valued. This is underpinned 
by the culturally diverse workforce employed by the Group, 
which reflects the local populations in the areas where DX 
operates. In all cases the Group fulfils its legal obligations under 
the Equality Act 2010. Additionally, DX audits gender pay 
equality biannually. 
DX strives to surpass its legal obligations through the 
implementation of its policies and programmes for recruitment, 
career development and promotion which are based solely on 
the ability and performance of the individual and the needs of 
the Group’s business.
Our continued focus remains driver safety and competence 
through the Certificate of Professional Competence but also 
through Driver Assessors who are qualified through ROSPA 
(The Royal Society for the Prevention of Accidents). Investment 
in management training in regard to transport regulations and 
fleet management so ensuring operator licence compliance 
takes into account succession into our Transport Manager roles 
and therefore a pipeline of talent for these critical areas.
Apprenticeship programmes are available to our colleagues that 
focus on enhancing their skills within their current roles; these 
range from customer service to warehouse apprenticeships. 
Our induction programme ensures our colleagues understand 
our full product range and our ‘OneDX’ vision. 
All colleagues are offered a competitive benefits package, 
including a provision for death in service. There are a number 
of voluntary benefits to support colleagues’ welfare and the 
opportunity to participate in one of the Group’s stakeholder 
pension schemes.
At admission, all eligible colleagues had the opportunity 
to participate in a SAYE, sharesave scheme. In addition, 
qualifying management colleagues may have the opportunity 
to participate in a CSOP. Whilst these existing schemes have 
subsequently been cancelled, it is the intention to establish new 
schemes in the new financial year such to once again provide an 
opportunity for our colleagues to personally participate in the 
success of DX. Further details are set out in the Directors’ 
Remuneration Report on pages 30 to 33.
The Group encourages an active interest in Company activities 
at all levels and seeks to receive and consider the views of 
colleagues over a wide range of subjects. This aim is achieved 
through a fully representative colleague partnership 
programme, which ensures two-way communications and 
colleague involvement through biannual meetings. The 
colleague partners have access to the Executive Team to report 
and discuss any issues arising. Regular news bulletins are 
distributed throughout the Group and a quarterly newspaper is 
produced with a mixture of business and colleague news. Senior 
management also attend monthly conference calls lead by the 
Chief Executive Officer and regular conferences to ensure 
cohesive engagement throughout the Company and to raise 
awareness of the financial and economic factors affecting the 
Company’s performance. 
LABOUR TURNOVER 26.5%
Labour turnover is reported at Group level, showing voluntary 
leavers during the last financial year. Voluntary leavers over the 
12 months since June 2015 have remained similar to that of the 
previous year (26.1%).
DISABLED EMPLOYEES
Applications for employment by disabled persons are always 
fully considered, bearing in mind the aptitudes of the applicant 
concerned. In the event of members of staff becoming disabled, 
every effort is made to ensure that their employment with the 
Group continues and that appropriate training is arranged. It is 
the policy of the Group that the training, career development 
and promotion of disabled persons should, as far as possible, 
be identical to that of other employees. 36
ANNUAL REPORT AND ACCOUNTS 2016
NOTIFIABLE INTERESTS
The Company has been notified of direct and indirect interests 
in voting rights equal to or exceeding 3% of the Ordinary Share 
capital of the Company as set out in the table below:
28 September 2016
Fund Manager
Percentage  
holding
Number  
of shares
Fidelity Worldwide 10.0% 20,052,550
J O Hambro Capital 
Management 9.1% 18,219,838
Ruffer LLP 7.8% 15,613,276
AXA Framlington 5.1% 10,275,000
Hargreave Hale 4.9% 9,771,691
Miton Asset Management 
Limited 4.4% 8,898,831
Chelverton Asset 
Management 4.4% 8,775,000
Gatemore Capital 
Management 4.4% 8,772,109
Premier Asset Managers 3.8% 7,550,000
Hargreaves Lansdown AM 3.3% 6,608,427
Hedley & Co 3.2% 6,494,458
Per shareholder register as at 28 September 2016.
SHARE CAPITAL
Details of the Company’s share capital are set out in note 19 to 
the financial statements. The Company’s issued share capital 
consists of 200,525,500 Ordinary Shares with a nominal value 
of £0.01 each. All shares rank equally and are fully paid. No 
person holds shares carrying special rights with regard to the 
control of the Company. Each share carries the right to one vote 
at general meetings of the Company and no right to fixed 
income. The Company has no treasury shares.
DIRECTORS’ INTERESTS
The number of Ordinary Shares of the Company in which the 
Directors are beneficially interested is set out in the Directors’ 
Remuneration Report on page 31.
Petar Cvetkovic, Chief Executive Officer, purchased 2,935,000 
additional £0.01 Ordinary Shares in the capital of the Company 
on 9 March 2016 at a purchase price of £0.17 each, taking his 
total resultant beneficial holding of Ordinary Shares to 5,529,593 
and Lucy Woodall, wife of Ian Pain, Chief Financial Officer, 
purchased 1,500,000 additional £0.01 Ordinary Shares in the 
capital of the Company on 9 March 2016 at a purchase price of 
£0.17 each, taking Ian Pain’s total resultant beneficial holding of 
Ordinary Shares to 2,427,001. 
No Directors had any dealings in the shares of the Company 
between 30 June 2016 and the date of this report.
DIRECTORS’ REPORT CONTINUED
DIRECTOR INDEMNITIES AND INSURANCE
In accordance with the Companies Act 2006 and the 
Company’s Articles, the Company has purchased Directors’ and 
officers’ liability insurance, which remains in place at the date of 
this report. The Company reviews its insurance policies on an 
annual basis in order to satisfy itself that its level of cover 
remains adequate. 
AMENDMENT TO COMPANY’S ARTICLES
The Company may alter its Articles by special resolution passed 
at a general meeting.
DONATIONS
Charitable donations in the year ended 30 June 2016 amounted 
to £4,385 (2015: £13,007).
No payments were made to any political parties (2015: £nil).
DISCLOSURE OF INFORMATION TO AUDITOR
Each of the persons who were Directors of the Company 
at the date of approval of this Directors’ Report that they 
confirm, that, so far as they are aware, there is no relevant 
audit information of which the Company’s auditor is unaware; 
and each Director has taken all the steps that he ought to have 
taken as a Director to make himself aware of any relevant audit 
information and to establish that the Company’s auditors are 
aware of that information. 37
STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
The Directors are responsible for preparing the Annual Report 
and the financial statements in accordance with applicable law 
and regulations. 
The Company has chosen to include certain matters in its 
Strategic Report that would otherwise be disclosed in this 
Directors’ Report. An indication of likely future developments 
may be found in the Strategic Report.
Company law requires the Directors to prepare group and 
parent company financial statements for each financial year. 
As required by the AIM Rules of the London Stock Exchange 
they are required to prepare the Group financial statements 
in accordance with IFRSs as adopted by the EU and applicable 
law and have elected to prepare the parent Company financial 
statements on the same basis. 
Under company law the Directors must not approve the 
financial statements unless they are satisfied that they give a 
true and fair view of the state of affairs of the Group and parent 
Company and of their profit or loss for that period. In preparing 
each of the Group and parent Company financial statements, 
the Directors are required to: 
• select suitable accounting policies and then apply them 
consistently; 
• make judgements and estimates that are reasonable and 
prudent; 
• state whether they have been prepared in accordance with 
IFRSs as adopted by the EU; and 
• prepare the financial statements on the going concern basis 
unless it is inappropriate to presume that the Group and the 
parent Company will continue in business. 
The Directors are responsible for keeping adequate accounting 
records that are sufficient to show and explain the parent 
Company’s transactions and disclose with reasonable accuracy 
at any time the financial position of the parent Company and 
enable them to ensure that its financial statements comply with 
the Companies Act 2006. They have general responsibility for 
taking such steps as are reasonably open to them to safeguard 
the assets of the Group and to prevent and detect fraud and 
other irregularities. 
The Directors are responsible for the maintenance and integrity 
of the corporate and financial information included on the 
Company’s website. Legislation in the UK governing the 
preparation and dissemination of financial statements may differ 
from legislation in other jurisdictions.
STATEMENT OF DIRECTORS’ RESPONSIBILITIES 
IN RESPECT OF THE ANNUAL REPORT AND THE FINANCIAL STATEMENTS 
The Directors consider that the Annual Report and Accounts, 
taken as a whole, is fair, balanced and understandable and 
provides the information necessary for shareholders to assess 
the Group’s performance, business model and strategy.
Each of the Directors, whose names and functions are listed on 
page 24 of the Annual Report confirm that, to the best of their 
knowledge:
• the Group financial statements, which have been prepared in 
accordance with IFRSs as adopted by the EU, give a true and 
fair view of the assets, liabilities, financial position and loss/
profit of the Group;
• the Strategic Report and Directors’ Report include a fair 
review of the development and performance of the business 
and the position of the Group, together with a description of 
the principal risks and uncertainties that it faces;
• there is no relevant audit information of which the Company’s 
auditors are unaware; and
• they have taken all the steps that they ought to have taken as 
Directors in order to make themselves aware of any relevant 
audit information and to establish that the Company’s auditor 
is aware of that information.
By order of the Board 
IAN PAIN
CHIEF FINANCIAL OFFICER
5 OCTOBER 2016 38
ANNUAL REPORT AND ACCOUNTS 2016
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF DX (GROUP) PLC
OPINION ON OTHER MATTERS PRESCRIBED BY THE 
COMPANIES ACT 2006 
In our opinion the information given in the Strategic Report 
and the Directors’ Report for the financial year for which the 
financial statements are prepared is consistent with the 
financial statements.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY 
EXCEPTION 
We have nothing to report in respect of the following matters 
where the Companies Act 2006 requires us to report to you if, 
in our opinion: 
• adequate accounting records have not been kept by the 
parent Company, or returns adequate for our audit have 
not been received from branches not visited by us; or 
• the parent Company financial statements and the part of 
the Directors’ Remuneration Report to be audited are not 
in agreement with the accounting records and returns; or 
• certain disclosures of directors’ remuneration specified by 
law are not made; or 
• we have not received all the information and explanations 
we require for our audit.
DEREK MCALLAN
(Senior Statutory Auditor) 
for and on behalf of KPMG LLP, Statutory Auditor 
Chartered Accountants 
Arlington Business Park
Theale
Reading
RG7 4SD
5 October 2016 
Company registered number 08696699 
We have audited the financial statements of DX (Group) plc for 
the year ended 30 June 2016 set out on pages 39 to 63. The 
financial reporting framework that has been applied in their 
preparation is applicable law and International Financial 
Reporting Standards (“IFRSs”) as adopted by the EU and, as 
regards the parent Company financial statements, as applied 
in accordance with the provisions of the Companies Act 2006. 
This report is made solely to the Company’s members, as a 
body, in accordance with Chapter 3 of Part 16 of the Companies 
Act 2006. Our audit work has been undertaken so that we 
might state to the Company’s members those matters we are 
required to state to them in an auditor’s report and for no other 
purpose. To the fullest extent permitted by law, we do not 
accept or assume responsibility to anyone other than the 
Company and the Company’s members, as a body, for our 
audit work, for this report, or for the opinions we have formed. 
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND 
AUDITOR 
As explained more fully in the Directors’ Responsibilities 
Statement set out on page 37 the Directors are responsible 
for the preparation of the financial statements and for being 
satisfied that they give a true and fair view. Our responsibility 
is to audit, and express an opinion on, the financial statements 
in accordance with applicable law and International Standards 
on Auditing (UK and Ireland). Those standards require us to 
comply with the Auditing Practices Board’s Ethical Standards 
for Auditors.
SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS 
A description of the scope of an audit of financial statements  
is provided on the Financial Reporting Council’s website at 
www.frc.org.uk/auditscopeukprivate.
OPINION ON FINANCIAL STATEMENTS 
In our opinion: 
• the financial statements give a true and fair view of the state 
of the Group’s and of the parent Company’s affairs as at 
30 June 2016 and of the Group’s loss for the year then ended; 
• the Group financial statements have been properly prepared 
in accordance with IFRSs as adopted by the EU; 
• the parent Company financial statements have been properly 
prepared in accordance with IFRSs as adopted by the EU and 
as applied in accordance with the provisions of the 
Companies Act 2006; and 
• the financial statements have been prepared in accordance 
with the requirements of the Companies Act 2006 and, as 
regards the Group financial statements, Article 4 of the IAS 
Regulation.  STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
39
CONSOLIDA TED ST A TEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2016
2016 2015
Notes
Trading 
£m
Exceptional 
items 
£m
Total
 £m £m
Revenue 5 287.9 – 287.9 297.5
Operating costs 6 (278.1) (92.1) (370.2) (272.2)
Results from operating activities 9.8 (92.1) (82.3) 25.3
Analysis of results from operating activities
Earnings before interest, tax, depreciation and 
amortisation (“EBITDA”) 18.0 – 18.0 33.7
Depreciation (3.0) – (3.0) (3.4)
Amortisation of software and development costs (3.1) – (3.1) (3.1)
Amortisation of other intangibles (2.1) – (2.1) (1.9)
Exceptional items 9 – (92.1) (92.1) –
Results from operating activities 9.8 (92.1) (82.3) 25.3
Net finance costs 10 (0.5) – (0.5) (0.5)
Share of profits from associates 0.1 – 0.1 –
Profit/(loss) before tax 9.4 (92.1) (82.7) 24.8
Tax expense 11 (1.7) – (1.7) (4.9)
Profit/(loss) for the year 7.7 (92.1) (84.4) 19.9
Foreign currency translation differences (0.1) – (0.1) –
Total comprehensive income/(expense) for the year 7.6 (92.1) (84.5) 19.9
Earnings per share (pence):
Basic 21 3.8 (45.9) (42.1) 9.9
Adjusted 4.9 10.9
Adjusted earnings per share is calculated after:
 – excluding amortisation of other intangibles; and
 – excluding exceptional items.
The notes on pages 45 to 63 form part of these financial statements.  40
ANNUAL REPORT AND ACCOUNTS 2016
CONSOLIDA TED ST A TEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
Notes
2016 
£m
2015 
£m
Non-current assets
Property, plant and equipment 13 17.3 18.6
Intangible assets and goodwill 14 113.3 199.3
Investments in associates 16 2.0 1.9
Deferred tax assets 24 1.3 1.3
Total non-current assets 133.9 221.1
Current assets
Trade and other receivables 17 39.1 38.8
Cash and cash equivalents 18 4.3 7.0
Total current assets 43.4 45.8
Total assets 177.3 266.9
Equity
Share capital 19 2.0 2.0
Share premium 20 – 181.4
Reverse acquisition reserve 20 – –
Translation reserve 20 – 0.1
Retained earnings 20 98.1 10.7
Total equity 100.1 194.2
Non-current liabilities
Loans and borrowings 22 6.2 7.3
Provisions 23 3.2 3.5
Total non-current liabilities 9.4 10.8
Current liabilities
Current tax liabilities 0.7 2.6
Loans and borrowings 22 7.7 1.2
Trade and other payables 25 36.6 34.2
Deferred income 22.8 23.9
Total current liabilities 67.8 61.9
Total liabilities 77.2 72.7
Total equity and liabilities 177.3 266.9
The financial statements were approved by the Board of Directors on 5 October 2016 and signed on its behalf by:
PETAR CVETKOVIC   IAN PAIN
CHIEF EXECUTIVE OFFICER  CHIEF FINANCIAL OFFICER
The notes on pages 45 to 63 form part of these financial statements.  STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
41
Notes
2016 
£m
2015 
£m
Non-current assets
Investments 15 104.0 206.8
Total non-current assets 104.0 206.8
Current assets
Other receivables 17 6.7 0.2
Total current assets 6.7 0.2
Total assets 110.7 207.0
Equity
Share capital 19 2.0 2.0
Share premium 20 – 181.4
Retained earnings 20 81.2 12.6
Total equity 83.2 196.0
Non-current liabilities
Loans and borrowings 22 6.2 7.3
Trade and other payables 25 12.5 1.0
Total non-current liabilities 18.7 8.3
Current liabilities
Current tax liabilities 1.0 1.3
Loans and borrowings 22 7.7 1.2
Trade and other payables 25 0.1 0.2
Total current liabilities 8.8 2.7
Total liabilities 27.5 11.0
Total equity and liabilities 110.7 207.0
The financial statements were approved by the Board of Directors on 5 October 2016 and signed on its behalf by:
PETAR CVETKOVIC   IAN PAIN
CHIEF EXECUTIVE OFFICER  CHIEF FINANCIAL OFFICER
The notes on pages 45 to 63 form part of these financial statements. 
COMPANY ST A TEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016 42
ANNUAL REPORT AND ACCOUNTS 2016
CONSOLIDA TED ST A TEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2016
Notes
Share
 capital 
£m
Share 
premium 
£m
Reverse 
acquisition 
reserve
£m
Translation 
reserve
 £m
Retained 
earnings 
£m
Total 
£m
At 1 July 2014 2.0 181.4 280.0 0.1 (281.5) 182.0
Total comprehensive income for the year
Profit for the year – – – – 19.9 19.9
Reverse acquisition reserve transfer 20 – – (280.0) – 280.0 –
Total comprehensive income for the year – – (280.0) – 299.9 19.9
Transactions with owners of the Company, 
recognised directly in equity
Dividends 20 – – – – (8.0) (8.0)
Share-based payment transactions 8 – – – – 0.3 0.3
Total transactions with owners of the 
Company – – – – (7.7) (7.7)
At 30 June 2015 2.0 181.4 – 0.1 10.7 194.2
Total comprehensive expense for the year
Loss for the year – – – – (84.4) (84.4)
Other comprehensive expense – – – (0.1) – (0.1)
Share premium cancellation 20 – (181.4) – – 181.4 –
Total comprehensive expense for the year – (181.4) – (0.1) 97.0 (84.5)
Transactions with owners of the Company, 
recognised directly in equity
Dividends 20 – – – – (10.0) (10.0)
Share-based payment transactions 8 – – – – 0.4 0.4
Total transactions with owners of the 
Company – – – – (9.6) (9.6)
At 30 June 2016 2.0 – – – 98.1 100.1
At a shareholder General Meeting on 24 March 2016 the shareholders approved a special resolution to cancel the share premium 
account which was subsequently approved by the High Court of Justice on 20 April 2016. As a result, £181.4 million was transferred 
from share premium to retained earnings.
The notes on pages 45 to 63 form part of these financial statements.  STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
43
COMPANY ST A TEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2016
Notes
Share 
capital 
£m
Share 
premium 
£m
Retained 
earnings 
£m
Total 
£m
At 1 July 2014 2.0 181.4 5.3 188.7
Total comprehensive income for the year
Profit for the year – – 15.3 15.3
Total comprehensive income for the year – – 15.3 15.3
Transactions with owners of the Company, recognised 
directly in equity
Dividends 20 – – (8.0) (8.0)
Total transactions with owners of the Company – – (8.0) (8.0)
At 30 June 2015 2.0 181.4 12.6 196.0
Total comprehensive expense for the year
Loss for the year – – (102.8) (102.8)
Share premium cancellation 20 – (181.4) 181.4 –
Total comprehensive expense for the year – (181.4) 78.6 (102.8)
Transactions with owners of the Company, recognised 
directly in equity
Dividends 20 – – (10.0) (10.0)
Total transactions with owners of the Company – – (10.0) (10.0)
At 30 June 2016 2.0 – 81.2 83.2
The notes on pages 45 to 63 form part of these financial statements.  44
ANNUAL REPORT AND ACCOUNTS 2016
CONSOLIDA TED ST A TEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2016
Notes
2016 
£m
2015 
£m
Cash generated from operations 26 14.7 31.3
Interest paid (0.4) (0.4)
Tax paid (3.6) (3.2)
Net cash generated from operating activities 10.7 27.7
Cash flows from investing activities
Proceeds from sale of DX Business Direct – 2.5
Proceeds from sale of property, plant and equipment 0.8 0.1
Acquisition of associate – (1.9)
Acquisition of trademarks and domain names – (1.0)
Acquisition of property, plant and equipment (2.3) (3.3)
Software and development expenditure (4.2) (5.6)
Acquisitions of Legal Post and First Post (3.1) –
Net cash used in investing activities (8.8) (9.2)
Net increase in cash before financing activities 1.9 18.5
Cash flows from financing activities
Movement on revolving credit facility 6.5 –
Repayment of bank borrowings (1.2) (1.2)
Equity dividends paid (10.0) (8.0)
Net cash used in financing activities (4.7) (9.2)
Net (decrease)/increase in cash and cash equivalents (2.8) 9.3
Cash and cash equivalents at beginning of year 7.0 (2.2)
Effect of exchange rate fluctuations on cash held 0.1 (0.1)
Cash and cash equivalents at end of year 18 4.3 7.0
The notes on pages 45 to 63 form part of these financial statements.  STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
45
1 REPORTING ENTITY
The principal activity of DX (Group) plc (“the Company”) and its subsidiaries (together, “the Group” or “DX”) is the provision of mail, 
packets, parcels and freight delivery services. The Company is incorporated and domiciled in the United Kingdom. The address of 
its registered office is: DX House, Ridgeway, Iver, Buckinghamshire SL0 9JQ. The registered number of the Company is 08696699. 
2 BASIS OF PREPARATION
STATEMENT OF COMPLIANCE
The consolidated and Company financial statements have been prepared and approved by the Directors in accordance with 
International Financial Reporting Standards (“IFRSs”) as adopted by the European Union (‘Adopted IFRSs’).
The consolidated financial statements were authorised for issue by the Board of Directors on 5 October 2016.
JUDGEMENTS AND ESTIMATES
The preparation of financial information in conformity with IFRSs requires management to make estimates and assumptions that 
affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues 
and expenses during the reporting period. Although these estimates are based on management’s best knowledge of the amount, 
event or actions, actual amounts ultimately may differ from those estimates. 
GOING CONCERN
The Group’s business activities, together with the factors likely to affect its future development, performance and position are 
set out in the Chief Executive Officer’s Review on pages 8 to 11, the Chief Financial Officer’s Review on pages 14 to 16, and the 
Directors’ Report on pages 34 to 36. These statements describe the financial position of the Group; its cash flows, liquidity position 
and borrowing facilities; the Group’s objectives, policies and processes for managing its capital; its financial risk management 
objectives; details of its financial instruments and hedging activities; and its exposure to credit risk and liquidity risk.
The current economic conditions create uncertainty, particularly over the level of demand for the Group’s services. The Group’s 
forecasts and projections, taking account of reasonably possible changes in trading performance, show that it has no requirement 
for any additional short term borrowing facilities and that there is headroom against the Group’s banking covenants.
After careful consideration the Directors have a reasonable expectation that the Company and the Group will have adequate 
resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis in 
preparing the Annual Report and Accounts.
CAPITAL STRUCTURE
The Company was incorporated and registered in England and Wales on 19 September 2013 under the Companies Act 2006 as a 
private company limited by shares with the name Tralee Properties Limited. The Company changed its name to DX Newco Limited 
on 29 January 2014 and to DX (Group) Limited on 12 February 2014. The Company was reregistered as a public limited company 
under the name DX (Group) plc on 19 February 2014.
On 20 February 2014 the Company (through a new wholly owned subsidiary, DX (VCP) Limited) acquired all of the issued share 
capital of DX Holdings Limited and DX Secure Mail Limited from DX Finance Limited (a wholly owned subsidiary undertaking of the 
former parent undertaking). As a result of these acquisitions DX (Group) plc is the parent undertaking of the subsidiaries acquired 
from DX Group Limited.
On 27 February 2014 the Company’s shares were Admitted to the AIM market of the London Stock Exchange through a placing of 
185,000,000 Ordinary Shares of £0.01 each at £1.00 per Ordinary Share and a vendor placing of 15,525,500 Ordinary Shares of 
£0.01 each at £1.00 per share. 
The consolidated financial information is presented in sterling and, unless otherwise stated, has been rounded to the nearest 
£0.1 million (£m). 
3 SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies are summarised below. They have all been applied consistently throughout the year and the 
preceding year unless otherwise stated.
The financial statements have been prepared under the historical cost convention.
Under Section 408 of the Companies Act 2006 the Company is exempt from the requirement to present its own profit and loss account.
BASIS OF CONSOLIDATION
The financial information comprises a consolidation of the financial information of DX (Group) plc and all its subsidiaries. The financial 
year ends of all entities in the Group are coterminous. 
Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies generally accompanying 
a shareholding of more than half of the voting rights. Subsidiaries are fully consolidated from the date on which control is transferred 
to the Group. They are de-consolidated from the date that control ceases. 
NOTES TO THE FINANCIAL ST A TEMENTS 
FOR THE YEAR ENDED 30 JUNE 2016 46
ANNUAL REPORT AND ACCOUNTS 2016
3 SIGNIFICANT ACCOUNTING POLICIES CONTINUED
The excess of the consideration transferred over the fair value of the Group’s share of the identifiable net assets acquired is recorded 
as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the 
difference is recognised directly in the statement of comprehensive income. 
Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised 
losses are also eliminated except to the extent they provide evidence of impairment of the asset transferred. 
SEGMENT REPORTING
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker 
(“the CODM”). The CODM, who is responsible for allocating resources and assessing performance of operating segments, has been 
identified as the Board of Directors. 
FOREIGN CURRENCY TRANSLATION 
(a) Functional and presentation currency
Items included in the financial information of each of the Group’s entities are measured using the currency of the primary economic 
environment in which the entity operates (“the functional currency”). The consolidated financial information is presented in sterling, 
which is the functional and presentation currency of the Company and all of the subsidiaries based in the United Kingdom. The 
functional currency of the Group’s Irish operation is the euro.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the 
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end 
exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement. 
REVENUE
Revenue represents the value of sales, apportioned over the period to which it relates after excluding trade discounts, value added 
tax and similar sales related taxes.
Exchange subscription income invoiced in advance is deferred and recognised as revenue over the period in which the related service is 
provided. Deferred subscription income is included in the statement of financial position as deferred income within current liabilities.
All other turnover is recognised as the service to which it relates is rendered.
PROPERTY, PLANT AND EQUIPMENT 
Property, plant and equipment are stated at historic purchase cost less accumulated depreciation. Cost includes the original purchase 
price of the asset and the costs attributable to bringing the asset to its working condition for its intended use. 
Depreciation is provided at the following annual rates in order to write off each asset on a systematic basis:
Land Nil
Freehold buildings 2–2.5%
Short leasehold properties 4–20%
Plant, machinery and other equipment 10–33%
The assets’ residual values and useful lives are reviewed and adjusted if appropriate at each statement of financial position date. 
INTANGIBLE ASSETS 
(a) Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets of 
the acquired subsidiary at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill 
is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not 
reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. 
Goodwill is allocated to cash-generating units for the purpose of impairment testing, which in the case of the Group represents one 
cash-generating unit. 
(b) Other intangible assets
Other intangible assets are stated at historic purchase cost less accumulated amortisation. Cost includes the original purchase price 
of the asset and the costs attributable to implementing the expenditure for its intended use. Third party and internal development 
costs are capitalised when the relevant criteria are met.
Amortisation is provided at annual rates of not less than 20% in order to write off each asset on a systematic basis.
NOTES TO THE FINANCIAL ST A TEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2016 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
47
3 SIGNIFICANT ACCOUNTING POLICIES CONTINUED
(c) Impairment of non-financial assets
Assets that have an indefinite life, such as goodwill, are not subject to amortisation and are tested annually for impairment. Assets 
that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying 
value may not be recoverable. An impairment loss is recognised in the income statement when the asset’s carrying value exceeds its 
recoverable amount. Its recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. 
INVESTMENTS IN ASSOCIATES 
Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and 
operating policies. Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power of 
another entity.
Investments in associates are accounted for under the equity method and are recognised initially at cost. Goodwill on acquisitions is 
tested annually for impairment and carried at cost less accumulated impairment.
The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of equity-
accounted investees, after adjustments to align the accounting policies with those of the Group, from the date that significant 
influence commences until the date that significant influence ceases.
TRADE AND OTHER RECEIVABLES 
Trade receivables are recognised initially at fair value and subsequently at amortised cost, less provision for impairment. A provision 
for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all 
amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the 
debtor will enter bankruptcy or financial reorganisation and default or significant delinquency in payments are considered indicators 
that the trade receivable may be impaired. 
The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in 
the income statement within other external charges. When a trade receivable is uncollectible, it is written off against the allowance 
account for trade receivables. Subsequent recoveries of amounts previously written off are credited against other external charges 
in the income statement. 
Other receivables are non-interest bearing and are recognised initially at fair value and subsequently at amortised cost.
CASH AND CASH EQUIVALENTS 
Cash and cash equivalents include cash in hand and deposits held at call with banks. 
TRADE AND OTHER PAYABLES 
Trade payables are obligations to pay for goods and services which have been acquired in the commercial operations of the Group. 
Accounts payable are classified as current liabilities if payment is due within one year or less. If not they are presented as non-current 
liabilities. 
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. 
BORROWINGS 
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised 
cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the 
period of the borrowings using the effective interest method. Fair value is calculated based on the present value of future principal 
and interest cash flows, discounted at the market rate of interest at the measurement date.
LEASES
Leases are classified as finance leases when the terms of the lease transfer substantially all the risks and rewards of ownership to the 
Group. All other leases are classified as operating leases. For property leases, the land and building elements are treated separately 
to determine the appropriate lease classification. 
Operating leases 
Assets leased under operating leases are not recorded in the statement of financial position. Rental payments are charged directly to 
the statement of comprehensive income on a straight-line basis. 
PROVISIONS 
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated 
reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by 
discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and 
the risks specific to the liability. The unwinding of the discount is recognised as a finance cost.
TAXATION 
The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it 
relates to items recognised directly in other comprehensive income or in equity. In this case the tax is also recognised directly in 
other comprehensive income or in equity.  48
ANNUAL REPORT AND ACCOUNTS 2016
NOTES TO THE FINANCIAL ST A TEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2016
3 SIGNIFICANT ACCOUNTING POLICIES CONTINUED
(a) Current taxation
Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted or substantively enacted by 
the statement of financial position date. Management periodically evaluates positions taken in tax returns with respect to situations 
in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts 
expected to be paid to the tax authorities. 
(b) Deferred taxation
Deferred tax is recognised using the statement of financial position liability method, on temporary differences arising between the 
tax base of assets and liabilities and their carrying amount in the financial statements. Deferred tax is calculated at the tax rates that 
have been enacted or substantively enacted by the statement of financial position date and are expected to apply when the related 
deferred tax asset is realised or the deferred tax liability is settled. 
Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available against which 
the temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at each statement of financial 
position date. 
Deferred tax assets and liabilities are offset against each other when there is a legally enforceable right to set off current assets 
against current liabilities and it is the intention to settle these on a net basis. 
PENSION COSTS 
The Group operates a number of defined contribution pension schemes. The assets of the schemes are held separately from those 
of the Group in independently administered funds. The amount charged to the income statement in respect of pension costs and 
other post-retirement benefits is the contributions payable in the year. Differences between contributions payable in the year and 
contributions actually paid are shown as amounts either payable or receivable in the statement of financial position.
SHARE-BASED PAYMENT TRANSACTIONS
The grant-date fair value of share-based payment awards granted to employees is recognised as an employee expense, with a 
corresponding increase in equity, over the period that the employees become unconditionally entitled to the awards. The amount 
recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market performance 
conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards 
that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with 
non-vesting conditions, the grant-date fair value of the share-based payment is measured to reflect such conditions and there is no 
true-up for differences between expected and actual outcomes.
EXCEPTIONAL ITEMS 
The Group treats certain items which are considered to be one-off and not representative of the underlying trading of the Group as 
exceptional in nature. 
The Directors apply judgement in assessing the particular items, which by virtue of their scale and nature should be classified as 
exceptional items. The Directors consider that separate disclosure of these items is relevant to an understanding of the Group’s 
financial performance. 
CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS 
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations 
of future events that are believed to be reasonable under the circumstances. 
The Group makes certain estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, 
seldom equal the related actual results. The areas involving a higher degree of judgement or complexity, or areas where assumptions 
and estimates are significant to the consolidated financial information are considered to relate to: 
(a) Carrying value of goodwill
The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy with detailed 
disclosure in note 14. In assessing impairment, the lowest level of goodwill for which there are separately identifiable cash flows 
(cash-generating units) that can reasonably be assessed is for the Group as a whole. The recoverable amount of the goodwill is 
measured as the higher of its fair value less costs to sell and value in use. Value in use calculations require the estimation of future cash 
flows to be derived from the cash-generating units and to select an appropriate discount rate in order to calculate their present value. 
The estimation of the timing and value of underlying projected cash flows and the selection of appropriate discount rates involves 
management judgement. Subsequent changes to these estimates or judgements may impact the carrying value of the goodwill.  STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
49
3 SIGNIFICANT ACCOUNTING POLICIES CONTINUED
(b) Impairment of trade receivables
The assessments undertaken in recognising provisions and contingencies have been made in accordance with IAS 39. A provision for 
impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts 
due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will 
enter bankruptcy or financial reorganisation, and default or significant delinquency in payments are considered indicators that the 
trade receivable is impaired. 
(c) Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of a past event, it is probable 
that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. The amount of the 
provision requires estimation of the extent and timing of probable outflows of resources and to select an appropriate discount rate 
in order to calculate their present value. The estimation of the timing and value of underlying projected outflows of resources and 
the selection of appropriate discount rates involves management judgement.
FINANCIAL RISK FACTORS 
The Group’s activities expose it to a variety of financial risks: market risk (principally interest rate risk), credit risk and liquidity risk. 
The Group uses derivative financial instruments to hedge certain risk exposures where it considers it appropriate.
The policy for each of the above risks is described in more detail below. 
(a) Market risk
The Group finances its operations through a mixture of Ordinary Shares and bank borrowings. The Group’s interest rate risk arises 
from long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk which is partially 
offset by cash held at variable rates. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. 
The Group has previously managed its cash flow interest rate risk by using floating-to-fixed interest rate swaps. Such interest rate 
swaps have the economic effect of converting borrowings from floating rates to fixed rates. However no such swap arrangements 
are currently considered necessary in the current low interest climate and given the low level of ongoing debt.
The Group is exposed to a negligible element of foreign exchange risk, with only a limited number of supplies from abroad and the 
majority of sales made in the UK. 
(b) Credit risk
The Group’s principal current assets are cash deposits, cash and accounts receivable. The credit risk associated with cash is limited. 
The principal credit risk arises from non-recovery of trade receivables. In order to maintain credit risk, limits are set for customers 
based on a combination of payment history and third party credit references. Credit limits are reviewed by the credit controller on 
a regular basis in conjunction with debt ageing and collection history. 
(c) Liquidity risk
The Group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash 
safely and profitably. Short-term flexibility is achieved by the use of a revolving credit facility. The maturity of borrowings is set out 
in note 22. 
CAPITAL RISK MANAGEMENT 
The Group manages its capital to ensure that the Group will be able to continue as a going concern while maximising the return to 
shareholders through optimising the debt and equity balance. The capital structure of the Group consists of debt, which includes 
the borrowings disclosed in note 22, cash and cash equivalents, and equity attributable to equity holders of the parent comprising 
issued capital, reserves and retained earnings as disclosed in notes 19 and 20 and the statement of changes in equity. In order 
to maintain or adjust the capital structure, the Group may issue new shares, raise new borrowings or sell assets to reduce debt. 
The Group’s capital is not restricted. 
4 NEW STANDARDS AND INTERPRETATIONS NOT YET ADOPTED
The following new standards and amendments are in issue but not yet effective and have not been adopted early by the Group:
• Amendments to IAS 7 ‘Statement of cash flow’ – disclosure initiative to improve presentation and disclosure in financial statements
• Amendments to IAS 12 ‘Income taxes’ – amendments to add clarity to deferred tax treatment for debt instruments
• IFRS 15 ‘Revenue from contracts with customers’ – new standard for revenue recognition
• IFRS 9 ‘Financial instruments’ – new standard for financial instruments accounting
• Amendments to IFRS 2 ‘Share-based Payment’ – clarification of the accounting for certain types of arrangements
• IFRS 16 ‘Leases’ – new standard for lease accounting
The implementation of these new standards is not expected to have a material impact on the consolidated results, financial position 
or cash flows of the Group. 50
ANNUAL REPORT AND ACCOUNTS 2016
NOTES TO THE FINANCIAL ST A TEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2016
5 SEGMENT INFORMATION
2016 
£m
2015 
£m
Revenue:
Parcels and freight 159.3 154.1
Mail and packets 113.8 116.4
Logistics 14.8 27.0
Total revenue 287.9 297.5
EBITDA 18.0 33.7
Depreciation and amortisation (8.2) (8.4)
Exceptional items (92.1) –
Results from operating activities (82.3) 25.3
Finance charges (net) (0.5) (0.5)
Share of profits from associates 0.1 –
(Loss)/profit before tax (82.7) 24.8
The Board of Directors is considered to be the chief operating decision maker (“the CODM”). Due to the integrated nature of the 
operations the CODM considers there to be only one operating unit and reviews profitability, assets and liabilities on a Group basis. 
The CODM also considers there to be only one material geographical segment, being the United Kingdom and the Republic of Ireland.
6 OPERATING COSTS
2016 
£m
2015 
£m
Other external charges 181.7 170.9
Employee benefit expense (see note 8) 74.7 77.5
Depreciation of property, plant and equipment 3.0 3.4
Amortisation of intangible assets 5.2 5.0
Profit on sale of property, plant and equipment (0.1) –
Operating lease rentals 17.4 15.4
Other operating income (0.1) –
Impairment charges 88.4 –
Total operating costs 370.2 272.2
Trading activities 278.1 272.2
Exceptional items (see note 9) 92.1 –
Total operating costs 370.2 272.2
Amounts charged by the Group’s auditor are as follows:
2016 
£000
2015 
£000
Fees payable to the Company’s auditor for the audit of the Company’s annual accounts 33 33
Fees payable to the Company’s auditor and its associates for other services to the Group:
The audit of the Company’s subsidiaries pursuant to legislation 87 85
Total audit fees 120 118
Other services:
– tax services 60 106
– other 28 6
Total non-audit fees 88 112
Total fees 208 230
Fees payable to KPMG LLP and their associates for non-audit services to the Company are disclosed on a consolidated basis and 
therefore no separate disclosure for DX (Group) plc on an individual basis is required. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
51
7 DIRECTORS’ EMOLUMENTS
TOTAL REMUNERATION
2016 
£000
2015 
£000
Emoluments 825 950
AMOUNTS ACCRUED UNDER MONEY PURCHASE PENSION SCHEMES
No Director accrued benefits under money purchase schemes in the current or previous year.
HIGHEST PAID DIRECTOR
2016 
£000
2015 
£000
Emoluments 375 500
Details of transactions with Directors are disclosed in note 31.
8 EMPLOYEES
EMPLOYEE BENEFIT EXPENSE
2016 
£m
2015 
£m
Wages and salaries 67.4 70.1
Social security costs 5.8 6.0
Other pension costs 1.1 1.1
Share-based payment transactions 0.4 0.3
74.7 77.5
AVERAGE NUMBER OF PERSONS EMPLOYED (INCLUDING EXECUTIVE DIRECTORS)
2016 
Number
2015 
Number
Sales and marketing 116 112
Operations networks 2,623 2,733
Management and administration 243 351
2,982 3,196
9 EXCEPTIONAL ITEMS
2016 
£m
2015 
£m
Impairment charges 88.4 –
Planning and acquisition costs on proposed hub 3.3 –
Share-based payments accelerated charge 0.4 –
92.1 –
IMPAIRMENT CHARGES
During the year management reviewed the carrying value of the Group’s goodwill and concluded that an impairment charge of 
£88.4 million was required.
This charge followed the challenging industry conditions and a decline in profits which suggested an indicator of impairment. 
The recoverable amount of goodwill is calculated with reference to its value in use based on future cash flow projections. The key 
assumptions used in the calculation are disclosed in note 14.
PLANNING AND ACQUISITION COSTS ON PROPOSED HUB
Following the decision by the local authority not to approve planning for the proposed new hub in the West Midlands, planning 
and acquisition costs of £3.3 million relating to this project have been expensed. DX is hopeful that the appeal or revised planning 
application will be successful and some of the planning and design costs are likely to be applicable to alternative sites. However, 
given the lack of clarity as at the balance sheet date all such costs have been expensed.
SHARE-BASED PAYMENTS ACCELERATED CHARGE
This non-cash charge relating to share-based payment arrangements follows the cancellation of the Company Share Option Plan 
(“CSOP”) and Share purchase plan (equity-settled) (“SAYE”) during the year. The £0.4 million accelerated charge represents the 
remaining amount of the total grant-date fair value of the share-based payment awards granted to employees not previously 
recognised as an expense, with a corresponding amount added back in equity. Further details surrounding the cancellations are 
disclosed in note 28. 52
ANNUAL REPORT AND ACCOUNTS 2016
10 FINANCE INCOME AND EXPENSE
2016 
£m
2015 
£m
Finance income
Bank interest – –
Total finance income – –
Finance costs
Interest on bank loans and other 0.4 0.4
Amortisation of financing costs 0.1 0.1
Total finance costs 0.5 0.5
Net finance costs 0.5 0.5
11 INCOME TAX EXPENSE
(A) ANALYSIS OF CHARGE IN YEAR
2016 
£m
2015 
£m
Current tax
United Kingdom corporation tax
Current year (1.5) (4.9)
Adjustments in respect of prior periods 0.2 0.2
Total United Kingdom corporation tax (1.3) (4.7)
Overseas taxation (0.4) (0.3)
Total current tax (1.7) (5.0)
Deferred tax
Current year (0.1) 0.3
Adjustments in respect of prior periods 0.1 (0.2)
Total deferred tax – 0.1
Tax expense (1.7) (4.9)
Trading (1.7) (4.9)
Exceptional items – –
Tax expense (1.7) (4.9)
Adjustments in respect of prior periods’ deferred tax are decreased by £0.2 million (2015: £0.1 million) in respect of reductions in 
tax rates.
(B) FACTORS AFFECTING THE TAX EXPENSE FOR YEAR
The tax expense for the year differs from the expected amount that would arise using the weighted average rate of corporation tax 
in the UK for each year. The differences are explained below:
2016 
£m
2015 
£m
(Loss)/profit before tax (82.7) 24.8
Loss/(profit) before tax at the standard rate of UK corporation tax of 20.0% (2015: 20.75%) 16.5 (5.2)
Factors affecting charge for year:
– Impairment charges not deductible for tax purposes (17.7) –
– Other exceptional charges not deductible for tax purposes (0.7) –
– Adjustments in respect of prior years 0.1 –
– Effect of different tax rates (0.2) 0.2
– Other 0.3 0.1
Tax expense (1.7) (4.9)
(C) FACTORS THAT MAY AFFECT FUTURE TAX CHARGES
The UK corporation tax rate is 20% with effect from 1 April 2015. Reductions to 19% (effective 1 April 2017) and to 18% (effective 1 April 
2020) were substantively enacted on 26 October 2015.
This will reduce the Group’s future current tax charge accordingly. The deferred tax asset at 30 June 2016 has been calculated based 
on these rates.
NOTES TO THE FINANCIAL ST A TEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2016 STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
53
12 LOSS ATTRIBUTABLE TO THE COMPANY
The loss for the year includes a loss of £102.8 million (2015: £15.3 million profit) attributable to the Company after an exceptional 
impairment charge of £106.8 million. 
13 PROPERTY, PLANT AND EQUIPMENT
Freehold 
land and 
buildings
 £m
Short 
leasehold land 
and buildings 
£m
Plant and 
equipment 
£m
Vehicles 
£m
Total 
£m
Cost
At 1 July 2014 12.7 14.4 42.1 1.0 70.2
Additions 0.4 0.6 2.3 – 3.3
Disposals – – (1.7) (0.7) (2.4)
At 30 June 2015 13.1 15.0 42.7 0.3 71.1
At 1 July 2015 13.1 15.0 42.7 0.3 71.1
Additions – 1.2 1.2 – 2.4
Disposals (1.0) – – – (1.0)
At 30 June 2016 12.1 16.2 43.9 0.3 72.5
Depreciation
At 1 July 2014 4.6 10.9 35.0 1.0 51.5
Charge for the year 0.2 0.7 2.5 – 3.4
Disposals – – (1.7) (0.7) (2.4)
At 30 June 2015 4.8 11.6 35.8 0.3 52.5
At 1 July 2015 4.8 11.6 35.8 0.3 52.5
Charge for the year 0.2 0.8 2.0 – 3.0
Disposals (0.3) – – – (0.3)
At 30 June 2016 4.7 12.4 37.8 0.3 55.2
Net book value
At 30 June 2016 7.4 3.8 6.1 – 17.3
At 30 June 2015 8.3 3.4 6.9 – 18.6
The cost of land not being depreciated is £2.8 million (2015: £2.8 million).
14 INTANGIBLE ASSETS AND GOODWILL
Goodwill 
£m
Software and 
development 
costs 
£m
Customer 
relationships 
£m
Trademarks 
and domain 
names 
£m
Outstanding 
orders 
£m
Total 
£m
Cost
At 1 July 2014 189.1 22.3 8.1 – 0.4 219.9
Additions – 5.6 – 1.0 – 6.6
Disposals – – – – – –
At 30 June 2015 189.1 27.9 8.1 1.0 0.4 226.5
At 1 July 2015 189.1 27.9 8.1 1.0 0.4 226.5
Additions 2.4 4.2 1.0 – – 7.6
Disposals – – – – – –
At 30 June 2016 191.5 32.1 9.1 1.0 0.4 234.1
Amortisation
At 1 July 2014 0.7 17.5 3.6 – 0.4 22.2
Charge for the year – 3.1 1.6 0.3 – 5.0
Disposals – – – – – –
At 30 June 2015 0.7 20.6 5.2 0.3 0.4 27.2
At 1 July 2015 0.7 20.6 5.2 0.3 0.4 27.2
Charge for the year – 3.1 1.6 0.5 – 5.2
Impairment 88.4 – – – – 88.4
Disposals – – – – – –
At 30 June 2016 89.1 23.7 6.8 0.8 0.4 120.8
Net book value
At 30 June 2016 102.4 8.4 2.3 0.2 – 113.3
At 30 June 2015 188.4 7.3 2.9 0.7 – 199.3 54
ANNUAL REPORT AND ACCOUNTS 2016
NOTES TO THE FINANCIAL ST A TEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2016
14 INTANGIBLE ASSETS AND GOODWILL CONTINUED
In May 2016 the Group acquired the trade and assets of Legal Post (Scotland) Limited (“Legal Post”) and First Post Limited (“First Post”) 
for £3.4 million (inclusive of costs), of which £0.3 million consideration was deferred until after 30 June 2016. Total acquisition cost of £3.4 
million consists of £1.0 million customer relationships and £2.4 million goodwill. As previously announced, in July, the Competition & Markets 
Authority (“CMA”) informed us that it was reviewing this acquisition and therefore served an Initial Enforcement Order prohibiting further 
integration of our DX Exchange and DX Mail services operations with those of Legal Post and First Post. However, as we reported on 
16 September, the CMA has now revoked the Initial Enforcement Order and we have resumed the integration.
Goodwill has an indefinite useful life and is subject to annual impairment testing. The goodwill all relates to the Group’s principal activity. 
The Group is considered to represent one cash-generating unit for the purposes of impairment testing. 
The recoverable amount of the goodwill has been calculated with reference to its value in use. The key assumptions used in this 
calculation are shown below:
2016 2015
Impairment charge recognised £88.4m –
Period on which management approved forecasts are based One year One year
Growth rate applied beyond approved forecast period 2.2% 2.6%
Discount rate 8.8% 8.1%
The cash flow projections assume revenue growth and increasing profitability from continuing efficiencies from investment in the 
operating network. 
Due to the diverse nature of the Group’s customer base the Directors consider that the appropriate growth rate to use is that issued 
by the Institute for Fiscal Studies for the UK economy as a whole.
Sensitivity analyses indicate that the estimated growth rate would need to fall to minus 2.0% before giving rise to an impairment 
of goodwill.
The result of this review was that no impairment charges were required at the statement of financial position date. 
15 INVESTMENTS
Company
Shares in Group 
companies 
£m
Loans to Group 
companies 
£m
Total 
£m
Cost
At 1 July 2015 0.1 206.7 206.8
Additions – 4.0 4.0
Disposals – – –
At 30 June 2016 0.1 210.7 210.8
Provisions
At 1 July 2015 – – –
Impairment 0.1 106.7 106.8
At 30 June 2016 0.1 106.7 106.8
Net book value
At 30 June 2016 – 104.0 104.0
At 30 June 2015 0.1 206.7 206.8
At 30 June 2016 DX (Group) plc owned, directly or indirectly, 100% of each class of issued shares of the following companies, save 
that in the case of DX (VCP) Limited certain employees hold a minority interest in the company:
Principal activity
Directly owned:
DX (VCP) Limited Intermediate holding company
Indirectly owned:
DX Network Services Limited Mail services
DX Secure Limited In Members’ Voluntary Liquidation
DX Network Services Ireland Limited (registered and operates in the Republic of Ireland) Mail services
DX Freight Limited In Members’ Voluntary Liquidation
DX Holdings Limited Intermediate holding company
DX Secure Mail Limited Intermediate holding company
DX Services Limited Intermediate holding company
DX McBride Limited Intermediate holding company
Ewenny Limited Intermediate holding company
QYJ Limited Intermediate holding company
DX (EBT Trustees) Limited Dormant
DX Business Direct Limited Dormant
DX Electronic Services Limited Dormant
Special Mail Services Limited Dormant
The above companies are registered and operate in England and Wales unless otherwise stated.  STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
55
15 INVESTMENTS CONTINUED
During the prior year the trade and assets of DX Secure Limited and DX Freight Limited were transferred in entirety to DX Network 
Services Limited. Further to the completion of the transfers, the resulting non-trading shell company subsidiaries have no assets or 
third party liabilities and are being eliminated by way of a Members’ Voluntary Liquidation.
16 INVESTMENTS IN ASSOCIATES
Group Company
Gnewt Cargo Limited
2016 
£m
2015
 £m
2016 
£m
2015
 £m
Non-current assets 0.3 0.2 – –
Current assets 0.9 0.7 – –
Non-current liabilities – – – –
Current liabilities (0.8) (0.7) – –
Net assets 0.4 0.2 – –
Group’s share of net assets 0.2 0.1 – –
Goodwill 1.8 1.8 – –
Carrying amount of investment 2.0 1.9 – –
On 9 December 2014 the Group acquired a 49.8% non-controlling interest in Gnewt Cargo Limited (“Gnewt”), an environmentally 
friendly delivery services provider in the UK.
17 TRADE AND OTHER RECEIVABLES
Group Company
2016 
£m
2015 
£m
2016 
£m
2015 
£m
Trade receivables 21.2 21.2 – –
Other receivables 2.6 2.6 – –
Prepayments and accrued income 15.3 14.7 – –
Amounts owed by subsidiary undertakings – – 6.7 0.2
Amounts owed by associates (see note 31) – 0.3 – –
39.1 38.8 6.7 0.2
18 CASH AND CASH EQUIVALENTS
Group Company
2016 
£m
2015 
£m
2016 
£m
2015 
£m
Cash and cash equivalents 4.3 7.0 – –
19 SHARE CAPITAL
ALLOTTED, CALLED UP AND FULLY PAID – 2015 AND 2016
Group and Company
Number
 (000) £000
Ordinary Shares of 1p each 200,525 2,005
There were no changes in share capital during the year. 56
ANNUAL REPORT AND ACCOUNTS 2016
NOTES TO THE FINANCIAL ST A TEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2016
20 SHARE PREMIUM AND RESERVES
Group
Share 
premium 
£m
Reverse 
acquisition 
reserve
 £m
Translation 
reserve 
£m
Retained 
earnings 
£m
At 1 July 2014 181.4 280.0 0.1 (281.5)
Profit for the year – – – 19.9
Reverse acquisition reserve transfer – (280.0) – 280.0
Dividends – – – (8.0)
Share-based payment transactions – – – 0.3
At 30 June 2015 181.4 – 0.1 10.7
At 1 July 2015 181.4 – 0.1 10.7
Loss for the year – – – (84.4)
Exchange adjustments – – (0.1) –
Share premium cancellation (181.4) – – 181.4
Dividends – – – (10.0)
Share-based payment transactions – – – 0.4
At 30 June 2016 – – – 98.1
Company
Share 
premium 
£m
Retained 
earnings 
£m
At 1 July 2014 181.4 5.3
Profit for the year – 15.3
Dividends – (8.0)
At 30 June 2015 181.4 12.6
At 1 July 2015 181.4 12.6
Loss for the year – (102.8)
Share premium cancellation (181.4) 181.4
Dividends – (10.0)
At 30 June 2016 – 81.2
SHARE PREMIUM CANCELLATION
At a shareholder General Meeting on 24 March 2016 the shareholders approved a special resolution to cancel the share premium 
account which was subsequently approved by the High Court of Justice on 20 April 2016. As a result, £181.4 million was transferred 
from the share premium account to retained earnings.
21 EARNINGS PER SHARE
BASIC EARNINGS PER SHARE
The calculation of basic earnings per share at 30 June 2016 is based on the loss after exceptional items for the year of £84.4 million 
(2015: £19.9 million profit) and average number of shares in issue of 200.5 million (2015: 200.5 million) calculated as follows: 
2016 2015
Trading 
£m
Exceptional 
items 
£m
Total 
£m
Exceptional 
items 
£m
Profit/(loss) for the year 7.7 (92.1) (84.4) 19.9
2016 
Number 
(000)
2015 
Number
 (000)
Number of Ordinary Shares at 30 June 200,525 200,525
DILUTED EARNINGS PER SHARE
None of the share option schemes would result in a dilution of the basic earnings per share at 30 June 2016 (2015: no dilution). 
Dilution is dependent on share price movements therefore there remains the possibility for future dilution of earnings per share. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
57
22 LOANS AND BORROWINGS
(A) THIRD PARTY
Group Company
2016 
£m
2015 
£m
2016
 £m
2015 
£m
Non-current liabilities
Bank loans 6.4 7.6 6.4 7.6
Deferred loan issue costs (0.2) (0.3) (0.2) (0.3)
6.2 7.3 6.2 7.3
Current liabilities
Revolving credit facility 6.5 – 6.5 –
Bank loans 1.2 1.2 1.2 1.2
7.7 1.2 7.7 1.2
Amounts due under the bank term loan facility and the revolving credit facility are secured by means of a charge over the assets and 
undertaking of the Group.
(B) TERMS AND CONDITIONS OF OUTSTANDING LOANS WERE AS FOLLOWS:
At 30 June 2015
Nominal interest rate
Year of 
maturity
Face 
value 
£m
Carrying 
amount 
£m
Bank term loan LIBOR + 2.00% 2017 8.8 8.8
At 30 June 2016
Nominal interest rate
Year of 
maturity
Face 
value 
£m
Carrying 
amount 
£m
Bank term loan LIBOR + 2.00% 2017 7.6 7.6
All loans are denominated in sterling.
In addition to the bank term loan the Group also has a £13.0 million revolving credit facility with an interest rate of LIBOR plus 2.00%. 
Drawings of £6.5 million were made under this facility as at 30 June 2016 (2015: £nil).
23 PROVISIONS
Property 
repair costs 
£m
Insurance 
provision 
£m
Other 
provisions 
£m
Total 
£m
At 1 July 2014 2.8 1.9 2.6 7.3
(Credited)/charged to income statement (0.2) 1.3 (0.3) 0.8
Utilised (0.7) (2.3) (1.6) (4.6)
At 30 June 2015 1.9 0.9 0.7 3.5
At 1 July 2015 1.9 0.9 0.7 3.5
(Credited)/charged to income statement (0.7) 1.1 0.7 1.1
Utilised – (0.9) (0.5) (1.4)
At 30 June 2016 1.2 1.1 0.9 3.2
Provisions are made for the costs of property repairs where there is a significant backlog of repairs required. Provisions are also 
made for motor insurance claims not yet settled. Other provisions are made for the costs of integrating businesses and for future 
losses arising from onerous contracts. Property repair costs, insurance and other provisions are expected to be utilised over the 
period to April 2030.
The Group self insures against certain risks and based on such risks provides for all estimated future expected liabilities relating to the 
current and prior financial years, based on the level of historic claims experience. The provisions are likely to be utilised over the next 
three years. 58
ANNUAL REPORT AND ACCOUNTS 2016
NOTES TO THE FINANCIAL ST A TEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2016
24 DEFERRED TAX ASSETS
Group 
£m
Company
 £m
At 1 July 2014 1.2 –
Credited to the income statement 0.1 –
At 30 June 2015 1.3 –
At 1 July 2015 1.3 –
Credited to the income statement – –
At 30 June 2016 1.3 –
The deferred tax asset is made up as follows:
Group Company
2016 
£m
2015 
£m
2016
 £m
2015 
£m
Intangible assets (0.7) (0.9) – –
Accelerated capital allowances 1.9 2.2 – –
Other timing differences 0.1 – – –
1.3 1.3 – –
The unrecognised deferred tax assets of the Group at 30 June 2016 total £1.2 million (2015: £1.3 million) which, in the opinion of the 
Directors, are not expected to be utilised in the future. There are no unrecognised deferred tax assets for the Company at 30 June 
2016 (2015: £nil).
25 TRADE AND OTHER PAYABLES
Group Company
2016 
£m
2015 
£m
2016
 £m
2015 
£m
Non-current liabilities
Amounts owed to subsidiary undertakings – – 12.5 1.0
– – 12.5 1.0
Current liabilities
Trade payables 16.5 14.3 – –
Social security and other taxes 5.6 5.5 – –
Other payables 1.2 1.7 – –
Accruals 13.3 12.7 – –
Amounts owed to subsidiary undertakings – – 0.1 0.2
36.6 34.2 0.1 0.2
26 RECONCILIATION OF (LOSS)/PROFIT FOR THE YEAR TO CASH GENERATED FROM OPERATIONS
2016 
£m
2015 
£m
Cash flows from operating activities
(Loss)/profit for the period (84.4) 19.9
Adjustments for:
– Impairment charges 88.4 –
– Depreciation 3.0 3.4
– Amortisation of intangible assets 5.2 5.0
– Finance costs 0.5 0.5
– Tax expense 1.7 4.9
– Gain on sale of property, plant and equipment (0.1) –
– Share of profits from associates (0.1) –
– Equity-settled share-based payment transactions 0.4 0.3
Net cash profit 14.6 34.0
Changes in:
– Trade and other receivables (0.3) 7.9
– Trade and other payables 1.8 (2.7)
– Deferred income (1.2) (4.1)
– Provisions (0.2) (3.8)
Net change in working capital 0.1 (2.7)
Cash generated from operations 14.7 31.3
    STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
59
27 FINANCIAL INSTRUMENTS
Short-term debtors and creditors have been excluded from the following disclosures.
(A) INTEREST RATE PROFILE
The table below shows the levels of fixed and floating third-party financial liabilities.
Bank term loan
2016 
£m
2015 
£m
Fixed rate – –
Floating rate 7.6 8.8
Total 7.6 8.8
(B) FAIR VALUES
Financial instruments utilised by the Group during the years ended 30 June 2015 and 30 June 2016, together with information 
regarding the methods and assumptions used to calculate fair values, can be summarised as follows:
Current assets and liabilities 
Financial instruments included within current assets and liabilities (excluding cash and borrowings) are generally short-term in nature 
and accordingly their fair values approximate to their book values. 
Borrowings and cash
The carrying values of cash and short-term borrowings approximate to their fair values because of the short-term maturity of these 
instruments. 
The financial instruments held by the Group do not, either individually or as a class, create potentially significant exposure to the 
market, credit, liquidity or cash flow interest rate risk. 
Fair values of financial assets and liabilities
Carrying amount and fair value
The fair value of all financial assets and liabilities is considered to be equal to the carrying values of these items due to their short-
term nature. Cash is held with counterparties with a Moody’s credit rating of Aa2 and Ba1. 
£1.0 million (2015: £0.7 million) of net financial assets and liabilities at the statement of financial position date were denominated in 
euros. All other net financial assets and liabilities were denominated in sterling. A 10% strengthening of sterling against the euro at 
30 June 2016 would have reduced equity and profit by £0.1 million (2015: £0.1 million).
A 1% increase or reduction in the interest rate applicable to the term loan and revolving credit facility would have had a £0.1 million 
(2015: £0.1 million) impact on the profit for the year.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual 
obligations, and arises principally from the Group’s receivables from customers and investment securities. The maximum exposure to 
credit risk is the amount of the receivables balance.
The ageing of trade and other receivables at the statement of financial position date that were not impaired was as follows:
2016 
£m
2015 
£m
Neither past due nor impaired 22.8 23.3
Past due 1–30 days 1.3 1.0
Past due 31–90 days 0.3 0.2
Past due more than 90 days – –
24.4 24.5 60
ANNUAL REPORT AND ACCOUNTS 2016
NOTES TO THE FINANCIAL ST A TEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2016
27 FINANCIAL INSTRUMENTS CONTINUED
The movement in the provision for bad and doubtful debts in respect of trade and other receivables was as follows:
Individual 
provisions 
£m
Collective 
provisions 
£m
At 1 July 2014 – 0.8
Amounts written back – (0.3)
At 30 June 2015 – 0.5
At 1 July 2015 – 0.5
Increase in provision – 0.1
At 30 June 2016 – 0.6
The Group considers that the amounts for which no provision has been made and are past due by more than 30 days, are still 
collectible in full, based on historic payment behaviour and extensive analysis of customer credit risk, including underlying customers’ 
credit ratings, when available.
28 EMPLOYEE BENEFITS
PENSION COMMITMENTS
The Group operates defined contribution pension schemes for all qualifying employees. The assets of the schemes are in managed 
funds and are therefore held separately from the assets of the Group.
The total cost charged to income of £1.1 million (2015: £1.1 million) represents contributions payable to these schemes by the Group 
at rates specified in the rules of the schemes.
Contributions amounting to £0.2 million (2015: £0.3 million) were payable to the schemes at 30 June 2016 and are included in creditors.
SHARE-BASED PAYMENTS
At 30 June 2016 the Company had the following share-based payment arrangements:
Company Share Option Plan (“CSOP”)
On 27 February 2014 the Company established an equity-settled share option programme that entitles key management and senior 
employees to purchase shares in the Company. The programme entitles holders of vested options to purchase shares at £1.00. 
Options over 4,590,000 shares, with a life of 10 years were issued under the CSOP, the sole vesting condition under the plan being 
three years’ service from the grant date.
On 17 February 2015 and 22 September 2015 the Company issued further options under the CSOP. Options over 300,000 shares 
and 510,000 shares respectively, with a life of 10 years were issued and entitled the holders of vested options to purchase shares at 
£0.95 and £0.82 respectively, the sole vesting condition under the plan being three years’ service from the grant date.
Subsequently, on 16 June 2016 all option holders were given the opportunity to opt out of the scheme on the basis that the options 
were very unlikely to come to fruition based on the share price at the time. As detailed in the Governance Report, the cancellation of 
this scheme was made with the intention of establishing a new scheme in the new financial year which reflects current share prices. 
The overwhelming majority of option holders supported this decision by deciding to opt out of the scheme.
Share purchase plan (equity-settled) (“SAYE”)
On 27 February 2014 the Company offered all of the employees with 12 months’ service in the Group the opportunity to participate 
in an employee share purchase plan. To participate in the plan the employees were required to save out of their gross salary over 
36 months the amount required to enable them to purchase the number of shares allocated to them at a price of £0.80. Only 
employees that remained in service and save the required amount of their gross salary for 36 consecutive months would become 
entitled to purchase the shares. Employees who ceased their employment, did not save the required amount of their gross salary 
in any month before the 36-month period expired or elect not to exercise their option to purchase shares are refunded their saved 
amounts. Options over 1,568,880 shares were issued under the share purchase plan.
Subsequently, on 17 June 2016 all option holders were given the opportunity to opt out of the scheme on the basis that the options 
were very unlikely to come to fruition based on the share price at the time. As detailed in the Governance Report, the cancellation of 
this scheme was made with the intention of establishing a new scheme in the new financial year which reflects current share prices. 
The overwhelming majority of option holders supported this decision by deciding to opt out of the scheme.  STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
61
28 EMPLOYEE BENEFITS CONTINUED
Value Creation Plan (“VCP”)
Under the VCP, A Ordinary Shares in DX (VCP) Limited (a subsidiary of the Company) were issued to the Executive Directors and six 
members of the Executive Team. The A Ordinary Shares were issued at nil cost and PAYE and National Insurance Contributions have 
been accounted for on the value of these shares at acquisition. 
The A ordinary shareholders are only entitled to realise any value from their A Ordinary Shares if pre-determined value hurdles are 
exceeded and after the expiry of minimum holding periods described below (referred to as ‘Vesting Period’). The value hurdles are 
detailed in the DX (VCP) Limited share rights and are linked to the market capitalisation of the Group. The A ordinary shareholders 
will, to the extent that the hurdle has been exceeded, be able to realise value by disposing of their A Ordinary Shares to the Company 
following publication of the Company’s financial results for the year ending 30 June 2017. The A ordinary shareholders also have the 
opportunity to dispose of 50% of their shares at an earlier date (on the publication of the results for the year ended 30 June 2016) 
but the ability to dispose at this earlier date is subject to the Company share price having hit a pre-determined target, which has not 
been achieved. The Company has the choice as to whether to settle the disposal in cash or by the issue of shares in the Company. 
The Company’s current intention is to issue shares in the Company.
Retaining ownership of the A Ordinary Shares is conditional on continuing employment. Specific rules will apply if the employee 
ceases employment during the Vesting Period.
The A Ordinary Shares have no dividend rights and very limited voting rights.
The Executive Directors also acquired B Ordinary Shares in DX (VCP) Limited. The B Ordinary Shares were acquired at market value. 
The B Ordinary Shares have limited economic rights but entitle each of the B shareholders to 5% of the voting rights in DX (VCP) 
Limited. 
Measurement of fair values
The fair values of the CSOP and share purchase plans were measured using the Black-Scholes basis of valuation. Expected volatility 
is based on the historic volatility of the AIM market of the London Stock Exchange measured over the contractual period of the options.
The shares in DX (VCP) Limited under the VCP were valued using the net present value of estimated future economic returns at 
26 February 2014, the date on which the employees were required to accept the offer to issue the shares to them.
Equity-settled share-based payments plans
The requirement that the employee had to save in order to purchase shares under the share purchase plan is a non-vesting condition. 
This feature was incorporated into the fair value at grant date by applying a discount to the valuation obtained. The discount was 
determined by estimating the probability that the employee will stop saving based on historic behaviour.
At 30 June 2016 a total amount of £523,000 (2015: £411,000) was invested by the participants in the share purchase plan. The plan is 
administered by a third party and the funds are held outside the Group. These amounts have been refunded to participants subsequent 
to the year end following participants’ decisions to opt out of the scheme.
The inputs used in the measurement of the fair values at grant date of the equity-settled share-based payment plans issued in the 
year and in prior years were as follows:
CSOP CSOP CSOP SAYE
Issued 
22 September 
2015 
Issued 
17 February 
2015 
Issued 
27 February 
2014 
Issued 
27 February 
2014 
Fair value at grant date £0.11 £0.13 £0.14 £0.25
Share price at grant date £0.82 £0.95 £1.00 £1.00
Exercise price £0.82 £0.95 £1.00 £0.80
Expected volatility 15.6% 15.6% 15.6% 15.6%
Expected life 10 years 10 years 10 years 3 years
Expected dividends Nil Nil Nil Nil
Risk-free interest rate (based on government bonds) 1.93% 1.78% 2.38% 1.07% 62
ANNUAL REPORT AND ACCOUNTS 2016
NOTES TO THE FINANCIAL ST A TEMENTS CONTINUED
FOR THE YEAR ENDED 30 JUNE 2016
28 EMPLOYEE BENEFITS CONTINUED
The number and weighted average exercise price of options under the CSOP and share purchase plan are as follows:
2016 2015
Weighted 
average 
exercise price 
£.p
Number of 
options
 000
Weighted 
average 
exercise price 
£.p
Number of 
options 
000
Granted during the year 0.82 510 0.95 300
Lapsed/opted out during the year 0.94 (6,309) 0.92 (468)
Outstanding at the end of the year – – 0.95 5,799
Exercisable at the end of the year – – – –
An immaterial amount of options remain outstanding on the above schemes at 30 June 2016 following the decision of the majority of 
holders to opt out of these schemes in the year.
The total expense recognised for the year and the total liabilities recognised at the end of the year arising from share-based payments 
are as follows:
2016 
£000
2015 
£000
Company Share Option Plan 353 125
Share purchase plan 77 104
Value Creation Plan 29 29
Total employee benefit expense recognised for share-based payments 459 258
29 COMMITMENTS
Group
2016 
£m
2015 
£m
Capital expenditure contracted but not provided for – –
OPERATING LEASES
At the statement of financial position date the Group had the following future aggregate minimum lease payments under non-
cancellable operating leases, set out in the years in which the leases expire:
Group
2016 
£m
2015 
£m
Land and buildings:
Leases that expire:
Within one year 0.7 0.5
Between two and five years 8.9 10.0
After five years 28.8 23.2
38.4 33.7
Other operating leases:
Leases that expire:
Within one year 1.1 1.8
Between two and five years 11.3 5.2
After five years 2.3 2.8
14.7 9.8
The total of future minimum lease payments under non-cancellable operating leases not later than one year is £13.2 million 
(2015: £11.5 million), later than one year and not later than five years is £28.5 million (2015: £22.2 million) and later than five years is 
£11.4 million (2015: £9.8 million).
Leases of land and buildings are typically subject to rent reviews at specified intervals and provide for the lessees to pay all insurance, 
maintenance and repair costs. STRATEGIC REPORT GOVERNANCE REPORT FINANCIAL STATEMENTS
63
30 CONTINGENCIES
The Company is party to a continuing guarantee and indemnity in respect of the bank term loan and revolving credit facility 
described in note 22. The amounts outstanding under these facilities at 30 June 2016 totalled £14.1 million (2015: £8.8 million).
No provisions are required or have been made in respect of these contingencies since, in the opinion of the Directors, they are not 
expected to result in financial loss for the Company.
31 RELATED PARTIES
The following transactions were carried out with connected parties:
KEY MANAGEMENT PERSONNEL
Key management comprises the Executive Directors, the Non-executive Directors and members of the Executive Team. The key 
management compensation is as follows:
2016 
£000
2015 
£000
Salaries, fees and other short-term employee benefits 2,135 2,036
Pension contributions 80 55
Compensation for loss of office 73 –
2,288 2,091
SALES AND PURCHASES OF GOODS AND SERVICES
The Group has trading relations with the associate, Gnewt Cargo Limited (see note 16). The transactions during the year included 
£313,000 purchases for the year to 30 June 2016 (2015: £239,000 for the period since becoming an associate on 9 December 2014) 
with an amount of £10,000 (2015: £20,000) owed by the Group at 30 June 2016. At 30 June 2016 the Group was not owed any 
amounts (2015: £250,000) from working capital provided to Gnewt Cargo Limited (see note 17). Interest charged on working capital 
provided during the year was £11,000 (2015: £6,000).
The Group also has trading relationships with boohoo.com plc and with Parcel Monkey Limited. Petar Cvetkovic was a director of 
boohoo.com and a shareholder in Parcel Monkey Limited. He subsequently resigned as a director of boohoo.com with effect from 
14 October 2014 and disposed of his shares in Parcel Monkey Limited in the year ended 30 June 2015. Accordingly, transactions with 
these entities are no longer considered related party transactions. Transactions in the prior year with these entities included 
£1,553,000 sales, £17,000 purchases and an amount owed to the Group at 30 June 2015 of £15,000.
All transactions were undertaken at arm’s length and on normal commercial terms. 64
ANNUAL REPORT AND ACCOUNTS 2016
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DX (Group) plc Annual Report and Accounts 2016