The UK Mail and parcels group Business Post announced today that its revenues grew 17% in thefiscal year ending 31 March 2007 thanks in the main to strong growth by its UK Mail subsidiary.
Revenues rose to GBP 326 million (EUR 480 million) from GBP 278 million (EUR 409 million) in2005-2006, while profit before tax, after exceptional items, more than doubled to GBP 9.8 million(EUR 14.4 million) from GBP 4.7 million last year. The group proposed a final dividend of 10.8p pershare, the same as the year before.
“This has been a demanding year for the business but one during which we have successfullydealt with a number of important issues, particularly within our parcels business,” commented chiefexecutive Guy Buswell.
“The second half was a positive one for the group, and we ended the year with a sound balancesheet. We have started the current year, and the next phase of our development, in an encouragingposition. Overall trading in the early weeks has been in line with management’s expectations,and the Board expects a year of progress.”
Business Post lost its FedEx contract earlier this year, but said it had successfully exitedit at a one-off cost of GBP 1.3 million, although this was partly compensated by new contracts forUK Mail, from the BBC, the UK government’s department of work and pensions, and a number of majorbanks.
UK Mail more than doubled revenues during the year, up 124% to GBP 90.3 million (EUR 132.8million) from GBP 40.4 million the year before. UK Mail operating profits doubled to GBP 6.4million (EUR 9.4 million) from GBP 3.2 million.
The group believes it has stabilised its B2B, B2C and international parcels business, whichhad undermined profits in previous years. Although revenues fell 1.2% for the year as a whole, toGBP 193.8 million (EUR 285 million) from GBP 196 million the year before, they grew 1.3% in thesecond half of the year compared to the last six months of 2005-2006. Profit from parcels fell byover 13% to GBP 15.1 million (EUR 22.2 million).
“Through a review of capacity utilisation and the effective management of operations we haveachieved a good reduction in average cost per consignment in our linehaul operations – the bulkovernight movement of parcels,” the company said in a statement.
“Importantly, we have continued to improve the performance of the former franchises now undercorporate ownership. We have transferred a further 11 to corporate ownership since March 2006,resulting in a remaining franchise network now of 16 franchisees. Overall, these transferredfranchise operations made a trading loss of GBP 3.3 million in the year of which GBP 1.4 millionwas incurred in the second half. These losses have now been eliminated.”
“Whilst underlying margins within Parcels remained acceptable, we believe there is scope tofurther enhance these over time,” Business Post added.
Overall revenues in the group’s other division, specialist services, comprising itsnationwide palletised goods delivery service, UK Pallets, and same-day courier service, UK Today,were almost the same as last year at GBP 41.5 millon (EUR 61 million), down slightly from GBP 41.6million. Similarly, operating profit in this division was roughly the same, falling slightly to GBP2 million from GBP 2.1 million the year before.
