UK Mail’s parcel volumes have surged by 25% in the half-year ending 30 September 2013 thanks toe-commerce growth, the company said today in a pre-close trading update.
The British mail and parcels delivery company said it had performed well overall in the firsthalf of its 2013-14 financial year, with strong trading in the second quarter that has resulted inhigher expectations for the six months than before.
UK Mail now expects its half-year group revenues to rise about 7%, which is an underlying riseof 4% when adjusted for three extra working days this year. This is ahead of the April – June Q1figures, which showed a 6% increase, or 3% on an underlying basis.
“Our Parcels business continued to deliver a strong performance, with average daily volumes forthe half-year increasing by some 25% compared to the same period last year. This volume growth waslargely driven by an increase in home deliveries related to online shopping, which resulted in acontinuation of the mix change towards B2C that we have previously disclosed,” the companystated.
But it noted: “We expect the level of parcels volume growth to moderate in the second half as weannualise the higher volume growth achieved from the end of the second quarter of the lastfinancial year.”
The company’s half-year mail revenues dropped slightly, largely due to mix changes, withaverage daily mail volumes some 2% ahead of the same period last year. “Mail remains wellpositioned in its market with a good pipeline of new business opportunities,” the company stressed.
UK Mail said its Courier and Pallet businesses performed in line with expectations, withslight revenue declines on the same period last year.
Looking ahead, the company said: “Whilst we remain cautious about the strength of theeconomic recovery in the UK, the markets in which we operate continue to provide us withopportunities to develop and grow our business.” The full half-year results will be announced onNovember 20.
Meanwhile, UK Mail is still in talks with the government over an agreement for the relocation ofits Birmingham hub should the controversial new north-south high-speed rail line ‘HS2’ go ahead asplanned. Britain’s planned new high-speed rail line from London to Northern England would passdirectly through the current hub location, meaning that the company will have to be financiallycompensated for moving to a new site.
“We continue to make progress with securing an agreement with HS2 for the relocation of ourBirmingham hub and expect confirmation by the Secretary of State for Transport to be receivedshortly. We hope to be in a position to provide a full update on our plans at the time of ourinterim results,” the firm said.
In the year ending March 2013, UK Mail’s 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.
