UK Mail Group has announced in its pre-close trading update for the financial year ending 31March 2011 that it expects low revenue growth of about 3% for the fourth quarter and total revenue
growth for the whole year of around 2.5%.As reported on 12 January 2011, underlying volume growth in the third quarter had been generallylower than expected, impacted by the snow in December that caused disruption to customers andoperations.
Since then, fourth quarter volumes in UK Mail’s parcels business have been subdued and noseasonal uplift in volumes is expected during March, as usual.
“Underlying economic conditions are affecting our parcels business. Combined with the impact ofcosts associated with the disruption in December continuing into January, this is expected toresult in our parcels business profits being below expectations. These issues have also impactedour mail business, but to a lesser extent. We thus now expect Group profit before tax for thefinancial year ending 31 March 2011 to be in the region of £16 million,” UK Mail said in astatement.
Despite these challenges, the company said it remained very competitive in the market andcontinued to win substantial contracts in both its parcels and mail businesses. “Our balance sheetremains strong with a good cash balance. Barring exceptional circumstances, the Board intends torecommend an unchanged final dividend of 11.8 pence per share in respect of the financial yearending 31 March 2011,” UK Mail specified.
Looking ahead, UK Mail expects the current economic conditions to impact its growth in theforthcoming financial year. “We remain focused on continuing to drive down our cost base, and webelieve that our strong competitive position should enable us to continue to outperform ourcompetitors,” the company added.
UK Mail Group will report its final results for the year ended 31 March 2011 on 18 May 2011.
