British postal and parcels group UK Mail said today its parcel volumes soared 25% in the April 1– June 30 first quarter of its 2013-14 fiscal year thanks to strong e-commerce growth.
“Our Parcels business continued to deliver a strong performance, with daily volumes for thequarter increasing by some 25% compared to the same period last year,” the company said in a firstquarter trading statement ahead of tomorrow’s AGM. It did not state the parcels revenue growthfigure.
“This volume growth was largely driven by an increase in home deliveries related to onlineshopping, which resulted in a continuation of the mix change towards B2C that we have previouslydisclosed. We expect the level of parcels volume growth to moderate going forward as we annualisethe higher volume growth achieved from the second quarter of the last financial year,” UK Mailadded.
CEO Guy Buswell said: “We have made a good start to the current financial year, with tradingperformance for the first quarter likely to be well ahead of our previous expectations.” Overallgroup revenues were 6% higher in the first quarter, which was an underlying rise of 3% whenadjusted for two extra working days.
Mail volumes also rose in the first quarter but revenues dropped slightly due to mix changes,the company said. The Courier and Pallet businesses performed in line with expectations, withslight year-on-year revenue declines.
Buswell added that UK Mail expects the terms of an agreement with high-speed rail operator HS2for the relocation of its Birmingham hub to be confirmed shortly by the Secretary of State forTransport. Britain’s planned new high-speed rail line from London to Northern England wouldpass directly through the current hub location, meaning that the company will have to befinancially compensated for moving to a new site.
Looking ahead, UK Mail said that despite the good start to the current financial year, “we stillassume that the UK economic backdrop will remain challenging in the current year and that thepricing environment will stay competitive”. However, the company stressed: “We continue to beconfident that we can use our inherent strengths to adapt to the opportunities and gain furthermarket share.”
In the year ending March 2013, UK Mail’s group revenues increased by 10.8% to £475.4 million,reported pre-tax profits improved 37% to £17.8 million and net profits were 41.9% higher at £13.5million. Key factors were revenue growth due to customer wins and a surge in parcel volumes in thesecond half of the year that led to a 17% increase for the whole year.
UK Mail said it expects to issue a pre-close trading update for the half year ended 30 September2013 in early October 2013.
