Strong Q4 gives rise to better year for UK Mail

PARCELS and logistics company UK Mail has seen a strong fourth quarter despite continued difficulties in its courier and pallets businesses.

In a pre-close trading update for the financial year ended March 31, 2013 the group said overall performance in Q4 was expected to be above previous expectations, with performance in March particularly strong.
 
Reported group revenues for the period are expected to show an increase of around 6% on the same quarter last year, giving total reported revenue growth for the financial year of some 11%.  

Adjusting for the increase in Royal Mail prices implemented in April 2012 and two less working days than in the same period last year, underlying group revenues for the quarter are expected to show an increase of some 6%, giving a total underlying revenue increase for the year of some 8%.

“Our Parcels business continued to deliver a strong performance, with volumes for the quarter increasing by some 20% compared to the same period last year.  This volume growth was largely driven by an increase in home deliveries related to online shopping, which resulted in a continuation of the mix change towards B2C that we have previously seen,” it said.

Its Mail business also achieved good revenue growth, driven by strong customer retention and business wins. However, the Courier business has seen a decline in revenues, although this was expected.  Revenues in the Pallets business also declined.  

“This business has faced a difficult year, however its position is improving and it enters the new financial year with a new management team and the previous network issues now largely resolved,” it added.

Overall, it said the group remained in a sound financial position.

Guy Buswell, Chief Executive of UK Mail, said: “The performance of our business in the final quarter of the year was again strong, partly helped by the early Easter.  I am particularly pleased with the performance of our parcels business where volume growth continues to be high.  In March we experienced the highest ever daily volumes across our combined parcels and mail businesses and, given our focus on our network management, we continued to maintain our strong customer service levels.
 
“We still assume that the UK economic backdrop 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. With our highly competitive business model, tight focus on costs and strong balance sheet, we remain confident that we will continue to make good progress.”
 
UK Mail will report its final results for the year ended March 31, 2013 on May 22.