YODEL SETS UP NEW PARCEL DELIVERY VENTURE

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Hatfield-based parcel delivery group Yodel has set up a new joint venture with PayPoint to help establish the Collect+ brand as the "premier parcels click-and-collect returns network".

Yodel has signed a long-term agreement with Yodel with a shared ambition to substantially increase coverage and volumes.

Under the deal, Yodel and PayPoint will retain 50:50 ownership of the Collect+ brand through new joint venture company Collect+ Brand Ltd, which has licensed the use of the Collect+ brand to both Yodel and PayPoint and will receive royalties from PayPoint and Yodel for each parcel they introduce.

Yodel will take responsibility for the operations and contracts and as a consequence, PayPoint will no longer bear the impact of logistics cost increases.

Meanwhile, PayPoint will be free for the first time to use its convenience retail network to sign agreements with other parcel carriers and to open Collect+ access to other carriers under license.

In recognition of PayPoint's rights to extend network access to other carriers, PayPoint has committed to a progressive reduction in its charges over a two-year period. It said that the impact of this should be mitigated by additional volume growth from existing and new retailers though the continuing relationship with Yodel and additional volume and fees from other carriers.

PayPoint's share of the result in the previous joint venture up to completion was a loss of £2m. This loss includes increased charges from Yodel for the period to completion, which will be booked in the second half of the current financial year.

All of the operations and contracts of the previous joint venture are transferring to Yodel for no consideration. The transfer will not result in a gain or loss to PayPoint.

The gross assets of the previous joint venture as at 30 September 2016 were £9m and they delivered a loss before tax of £0.4m for the year ended 31 March 2016.

Dominic Taylor, chief executive of PayPoint, said: "We are pleased to have reached agreement over the new arrangements with Yodel with respect to Collect+. Both companies remain absolutely focused on growing Collect+ as the premier parcels click and collect returns network.

"The new arrangements allow us to focus on our service offering and cost optimisation and for the first time, to open Collect+ access to other carriers. We also believe that this is good news for consumers as we develop a single network open to all, where eventually consumers can collect and return all their parcels, however carried, at the same convenience store."