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Annual Results

UK Mail sees FY result around lower end of views

09 April 2015 07:34

UK Mail Group said its overall performance for Q4 and the FY is anticipated to be at the lower end of the current range of expectations.

Reported Group revenues for the quarter (excluding Pallets) are expected to show an increase of some 5% compared to the same period in the previous year, giving total reported revenue growth for the financial year (excluding Pallets) of some 1%.

Its Parcels business continued to deliver a good performance, with volumes for the quarter increasing by around 12% compared to the same period last year, partly driven by new account wins as a result of the collapse of City Link.

This increase in volume experienced during the final quarter has taken parcel volumes temporarily above current effective operational capacity, resulting in above normal operating costs being incurred in the fourth quarter of the financial year.

"We expect this will continue into the first half of the new financial year, however the increased volume should be absorbed effectively once the move to the new hub is completed," the company said.

"Our Mail business also achieved good volume and revenue growth in the quarter. Mail volumes for the quarter increased by some 5% compared to the same period last year. This growth continues to be driven by strong customer retention and new business wins, which have further increased our share of the Down Stream Access market.

"Our Courier business saw a decline in revenues in the fourth quarter, although it has achieved revenue growth for the full year.

"Our Pallets business has now ceased operating, following our plans to close the business, announced in January 2015. The wind down was handled without disruption to our customers and with closure costs in line with our expectations.

"Our new hub and head office at Ryton, near Coventry, have been completed, on budget and on schedule. The move of our head office staff to the new office is largely completed, while the move to the new automated hub commences on 1 May 2015 and is planned to be complete by the end of July 2015.

"The commission and testing phase of the new hub's automation equipment is progressing well, and is approaching completion. Following the hub move the scale of automation of our parcels sortation operation is planned to increase from the current level of some 20% of volume to some 80% of volume by September 2015."

Story provided by StockMarketWire.com

Related Company: UKM

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