Accounting irregularities at DX Group

Troubled secure logistics firm DX Group is set to take a hit of £1.8 million in its results for the year to 30th June. The company found “an incorrect application of accounting policies relating to lease incentives on one of its sites”.

DX Group, which has just come out of negotiations with Menzies Distribution and a police investigation into its secure document delivery division, released a statement where the company said: “Following appropriate application of the policies, there will be a non-cash impact of £1.8m to previously guided underlying profits for the year ended 30 June 2017. This does not impact prior accounting periods.

“Under the correct accounting treatment, the £1.8m lease incentive will be credited back over the remaining c.10 year term of the lease.”

DX Group made an underlying profit of £11.9 million in 2016.

The firm is recovering after a series of crises including a shareholder revolt and a top management shakeup, as well as a police investigation and a failed merger deal in the last six months. Given the turbulence at the logistics and delivery firm, accounting irregularities seem to be the icing on the cake after a particularly torrid period. How all this will translate into the bottom line in 2017 is something to be seen – any profit will be good news, given the serious problems the firm has faced that individually threatened the company but together make for quite a difficult period in any firm’s story.

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