British parcels and mail operator UK Mail Group increased its parcel volumes by 10% in its thirdquarter from October – December 2011 thanks to more B2C business but otherwise saw relatively slow
growth in a tough trading environment due to the weak UK economy.In an interim statement, the company said that its overall performance for the third quarter was“in line with our expectations”. Reported revenues increased by about 6% year-on-year.Adjusting for the increase in Royal Mail prices implemented on 6 May 2011, however, underlyinggroup revenues increased by only 1%.
UK Mail’s Parcels business grew volumes by some 10% compared to the same period last year,driven by an increase in internet shopping-related home deliveries, although the change in mixtowards B2C restricted the level of revenue growth. Last autumn the firm launched a new onlineparcel collection and delivery service, www.ipostparcels.com, which allows any new customer toarrange parcel collection and delivery directly with UK Mail through an easy to use website.
The company stressed that operations were well managed throughout the peak Christmas period, “allowing us to maintain our full delivery service, something we believe a number of our majorcompetitors did not consistently achieve”. The pricing environment remains challenging, and thecompany expects a continuation of the volume mix seen in the first half of the year.
The Mail business grew its revenues on a reported basis. But on an underlying basis Mailrevenues were down some 4% on the same period in the previous year, reflecting the decline inaccess mail market volumes in the period. “We continue to have a good pipeline of customeropportunities,” the company added.
The Courier and Pallets businesses both reported good revenue growth, according to UK Mail,which said it remains in a sound financial position.
Looking ahead, the management said: “We remain cautious about the evolving market environmentand continue to assume that UK economic conditions will remain tough throughout 2012. Our strategyremains to continue to build competitive advantage, developing and investing in our low costintegrated network and bringing to market new products and services to drive profitable revenuegrowth.” Results for the 2011-12 year, ending in March, will be released in April and May.
During its 2010-2011 business year, UK Mail Group increased its group revenues by 2.8% to £395.8million (€448.7 million) while the operating profit was down 10% to £16.2 million (€18.37 million)and the profit before tax down 9.9% at £16.1 million (€18.25 million). In the six months toSeptember 2011, the company increased group revenues by 5.7% to £201.6 million but profit beforetax (before exceptional items) dropped to £6.8 million from the previous year’s £7.4 million andnet profit declined 16.2% to £4.4 million.
