UK Mail wins clients following Royal Mail strikes

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UK Mail, formerly Business Post, says it has won two large contracts on the back of the Royal Mail strike.

As it announced a 19% rise in pre-tax profit, UK Mail says it benefited from industrial action by the Communication Workers Union in response to a modernisation programme at the Royal Mail. During the October strike, a number of courier firms said they won business as a result. Further industrial action has since been put on hold until the new year by an interim agreement.

UK Mail says these new business wins, together with cost-cutting initiatives across the group, have helped boost its pre-tax profit.

Interim results for the six months to 30 September reveal pre-tax profit increased to £7m from £5.9m in the same period in 2008, despite turnover falling 3% to £188.2m compared with £194.5m the previous year.

Guy Buswell, UK Mail chief executive, says: "We have taken more cost out of our distribution network. This, together with new business wins and innovative new products coming on stream, has increased profit by 19% despite a slight revenue reduction. Our financial position is also strong, with net cash at the period end."

The company's mail and courier arm saw turnover rise 6% to £84.6m, but sales in parcels were down 11%, while the pallets and specialist services division saw a decline of 5%.

However, according to the group, parcel volumes benefited from the recent Royal Mail strikes, which prompted some businesses to seek alternative couriers.

For the year ending 31 March 2009, UK Mail achieved cost savings of £1.2m by three depot closures, a 5% reduction in its fleet and 150 redundancies, most of which were office-based.

The firm says efficiency was also achieved by implementing partial automation in its Birmingham hub. A £2m sorting machine went live in October, which offers more space for loading. Buswell says this has improved vehicle utilisation, and in the remainder of the current financial year, UK Mail hopes to reduce road journeys by one million km.

[DGP1]

Can anyone tell me how you can reduce the number of vehicles, reduce the number miles travelled and reduce the number of staff (albeit the majority office staff) and still take on new contracts
Have these people been to the RM school of information .