British mail and parcels group UK Mail saw parcels volumes rise by a high 20% in the first threemonths of this year powered by online shopping.
The group said in a pre-close trading update that it had a strong overall performance in thefinal quarter of its fiscal year, ending March 31, 2013. “Overall performance for the fourthquarter is expected to be above our previous expectations, with performance in March particularlystrong,” it stated.
The group’s Q4 revenues are expected to show a 6% rise, leaving full-year revenue growth ofabout 11%. Adjusting for the Royal Mail price prices implemented in April 2012 and two fewerworking days, underlying Q4 revenues are expected to rise 6% while the full-year underlyingincrease will be about 8%.
“Our Parcels business continued to deliver a strong performance, with volumes for the quarterincreasing by some 20% compared to the same period last year. This volume growth was largely drivenby an increase in home deliveries related to online shopping, which resulted in a continuation ofthe mix change towards B2C that we have previously seen,” the company said.
In February, UK Mail cut the prices of its consumer/SME brand ‘ipostparcels’ to generate moreonline sales, especially by SMEs and eBay traders.
The Mail business achieved good revenue growth, driven by strong customer retention and businesswins. But revenues in both the Courier and Pallets businesses declined, although the latterbusiness now has new management and has “largely resolved” its network problems, according to thecompany.
CEO Guy Buswell said: “The performance of our business in the final quarter of the year wasagain strong, partly helped by the early Easter. I am particularly pleased with the performance ofour parcels business where volume growth continues to be high. In March we experienced the highestever daily volumes across our combined parcels and mail businesses and, given our focus on ournetwork management, we continued to maintain our strong customer service levels.”
UK Mail Group will report its final results for the year ended 31 March 2013 on 22 May 2013.Last year UK Mail made a pre-tax profit of £15.1 million on revenues of £429 million.
Looking ahead to this year’s prospects, Buswell added: “We still assume that the UK economicbackdrop will remain challenging in 2013 and that the pricing environment will stay competitive.Our industry also continues to evolve, resulting in a number of opportunities and challenges. Withour highly competitive business model, tight focus on costs and strong balance sheet, we remainconfident that we will continue to make good progress.”
