UK Mail, the Business Post subsidiary, has won an GBP 8.1 million (EUR 12.3 million) contract withthe BBC’s television licensing division to dispatch over 60 million mail items a year.
The BBC began trying out UK Mail’s services in October last year and, according to BusinessPost, the corporation found it made “substantial” cost savings. Starting from 1 April, all BBC TVLicensing pre-sorted mail will now be dispatched via UK Mail’s downstream access facilities, set upto rival the services of national postal operator Royal Mail.
The new contract is a further boost to Business Post, following the award of a GBP 12 millioncontract to UK Mail in January to deliver pension statements and winter fuel payment notificationsfor the UK government. The company has lost its lucrative FedEx business following the US carrier’spurchase of Business Post competitor ANC.
Business Post said yesterday that the terms for ending the FedEx contract had beensatisfactorily agreed, although the contract will be terminated early – at the end of April insteadof September as originally envisaged.
“We are pleased to have reached an agreement with FedEx. We wanted this early termination toallow us to focus our resources immediately on the development of the new, longer termopportunities now open to the group,” said Guy Buswell, Business Post chief executive.
In the year ending 31 March, the FedEx contract will have generated Business Post revenue ofGBP 19 million and a profit of GBP 2 million, the company said. Business Post is to incur anexceptional cost of GBP 1 million relating to contract exit costs.
The company will provide a close period trading update on 4 April, ahead of its preliminaryresults announcement on 23 May. In the year ending March 31, 2006, the company had annual revenuesof GBP 278 million (EUR 414.6 million), up 19% on the previous year, but operating profit fell over40% to GBP 11.7 million.
