Extra bank holiday impacts UK Mail profits

INTERIM results from logistics group UK Mail, which has a major operations centre in Birmingham, report a ‘satisfactory’ figures despite  toughening market conditions inmpacting its second quarter performance.

For the six months to September, group revenues increased 5.7% to £201.6m, with profit falling from £7.4M to £6.8. The group blamed worsening economic conditions and the loss of an extra working day earlier in the year.

Chief executive Guy Buswell said: “The group saw a satisfactory first quarter followed by a more challenging second quarter for the markets in which we operate. These conditions have continued into the third quarter to date and we assume that the economic environment will remain tough throughout the current financial year.

“Our mail business remains a market leader with an operational template that is ideally suited to adapt to the demands of an evolving market, and our parcels business maintains a good position compared to its key competitors, thanks to the benefits of our low-cost network and the industry-leading services we are continuing to introduce. 

 

“Our strategy remains to continue to build competitive advantage, developing and investing in our low cost integrated network, driving down cost, investing in IT infrastructure and bringing to market new products and services to drive profitable revenue growth.”  

“We have taken further action to reduce the fixed costs of our business. We have closed two depots, reducing our total number of mail/parcels sites to 52. Along with some restructuring in a number of other areas of our business, this has resulted in one off costs of £0.8m. We will continue to monitor closely the potential for further opportunities to reduce our fixed cost base as the year progresses. 

“Our financial position remains strong, with net cash at the period end of £11.6m, compared to £8.5m as at 30 September 2010.”