Heavy snow in Britain in December not only disrupted parcel deliveries but also blocked hopes ofhigher profits this year, UK Mail announced today.
The British parcels and mail company said in a trading statement for the period since October 1that an expected volume rise did not occur before Christmas and it had to cope with higheroperating costs due to the severe winter weather conditions.
“As the third quarter developed, underlying volume growth was generally lower than expectedacross our parcels, courier and pallets businesses, with the traditional December pick-up notmaterialising. This was compounded by the snow in December causing disruption to our customers andoperations,” the company stated.
“Whilst we were able to manage our operations such that over 99% of our Christmas parceldeliveries were delivered before Christmas, the weather meant that we incurred additional cost inour network to hold and deliver consignments.”
These effects meant that the parcels business generated only slightly higher overall revenues inthe quarter, with growth early in the quarter offset by a reduction in December. The mail businesssaw good revenue growth throughout the quarter with additional volume gained from existing and newcustomers.
“The result of these factors is that, whilst overall group revenues for the quarter haveincreased by approximately 4% year on year, we now expect group profit for the full year to bebelow previous expectations and broadly in line with last year,” UK Mail stated.
Looking ahead, the company said it remained cautious about economic conditions but stressed thatthe adverse factors experienced during Q3 were largely one-off in nature. “Our business remainsstrong relative to our competitors and well positioned in its various markets,” it added.
In the year ending March 2009, UK Mail improved operating profits by 10.8% to £17.9 million(€20.7 million) on revenues of £385.2 million (€445.7 million) and its net profits increased 42.4%to £12.7 million (€14.7 million). In the first half of its 2009/10 business year (April – September2010), the company increased group revenues by 1.3% to £190.7 million, the operating profit was up4.3% at £7.5 million and net profits improved 4.9% to £5.3 million.
