HS2 plans threaten UK Mail’s Birmingham distribution hub

LOGISTICS group UK Mail is holding talks with the Department for Transport regarding the possible relocation of its major distribution facility in Birmingham.

The depot in Wolseley Drive lies in the path of the proposed HS2 rail line and the company is understood to be in negotiations with the department regarding a possible compensation package.

In its annual results statement today, the firm said: “Discussions are proceeding well, and further announcements will be made shortly once agreement has been reached with the Secretary of State for Transport.”

The high speed rail link, which proposes to cut journey times between London and Birmingham to around 47 minutes, has been the subject of much debate since the Queen’s Speech earlier this month proposed giving the Government greater powers to assemble land packages so the £17bn project can go ahead.

UK Mail has not confirmed where it might relocate the facility.

As far as its results are concerned, the company said group revenues for the year were up almost 11% at £475.4m. Adjusting for the increase in Royal Mail prices implemented in April last year and two less working days than in the previous year, underlying group revenues increased by 8.3%.  Group pre-tax profit increased by 17.7% on the previous year to £17.8m.

Guy Buswell, Chief Executive Officer of UK Mail, said: “I am pleased to report a very strong performance in the second half, which has led to a particularly good result for the year. Trading in the initial weeks of the current year has seen this positive trend continue, with further good growth in parcels volumes.
 
“Our industry is undergoing some fundamental changes, from the rise in e-commerce and e-communication to the expected forthcoming privatisation of Royal Mail, a valued business partner of UK Mail. Today’s results demonstrate that our business model has the inherent strength to adapt to this changing market and grasp the opportunities that exist.
 
“We continue to invest in our business, maintaining our focus on innovation, efficiency and high service levels. Alongside this, we have today announced major plans for significantly increased automation across our network. These plans will be a key factor in driving further volume growth and margin enhancement for the group.  We thus remain confident we will continue to make good progress in the current year and beyond.”