UK Mail post profit growth

[TrueBlueTerrier]

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Half-year results from UK Mail, formerly Business Post, told what has become a familiar story from listed companies: trading has been hit by the recession; cost-cutting has helped support profits; trading has shown signs of stabilising; but the outlook remains uncertain.

The most resilient parts of the group were the UK Mail postal business and the courier operation. Indeed, the mail operation managed to increase both first-half revenues and operating profits by over 5 per cent to £85m and £5.9m, respectively. About 70 per cent of its business is generated from posting out statements and statutory notifications, which has helped insulate trading. However, as the deregulated mail market matures, growth rates are slowing. So management plans to focus on product innovations and doing more work for existing customers to help continue drive up mail volumes from the current 17m items a day.

At the parcel division, cost savings helped offset the impact of a 10.7 per cent decline in revenue to £80m, so operating profit was only marginally down at £6.3m. Investment in automation should also benefit the bottom line in coming years. The specialist services division benefited from focusing on more profitable courier business, which helped lift profits from £1.2m to £2m.

Broker Investec is forecasting full-year adjusted pre-tax profits of £17m and EPS of 21.8p (£17.5m and 22.3p in 2009).

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[POSTMAN]

UK Mail H1 profit up 18.6% despite revenue fall

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UK Mail Group delivered an 18.6% rise in pre-tax profit to 7.0m from 5.9m for the six months to September, despite a 3.2% fall in revenue to 188.2m from 194.5m.

The group held its interim dividend at 6.4p.

Chief executive Guy Buswell said, 'We have taken more cost out of our distribution network, already one of the most efficient in the industry.'

The Mail and Courier businesses grew revenues by 5.6% and profit 5.4%, driven by new business wins and actions to reduce costs.

Parcels and Pallets revenues fell 10.7% but improved efficiency and reduced costs, leading to improved operating margins, largely offset the revenue decline.

The group had net cash at the period end of 3.6m, compared with net debt of 1.9m a year previously.

Trading in recent weeks was in line with management expectations. Mail strikes had had limited negative impact on volumes as customers had delayed rather than cancelled mailings.

The group said that as well as a continuing focus on cost reduction and efficiency gains, including investment in further depot automation, it was accelerating development of new products and services aimed at increasing its market.

[BELIAL]

2 weeks all out by CWU and Mr Bugswell would be history

[TrueBlueTerrier]

Mail strikes had had limited negative impact on volumes as customers had delayed rather than cancelled mailings.

In English - we did the same work but they are paying us later