City Link loses £26.4 million (Myroyalmail Gloating?)

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The premium express delivery company City Link has reported a loss of £26.4million.

This was a major blow for investors who had been advised last summer that the company would be profitable by now.

Now analysts do not believe the company will break even this year.

Rentokil, City Link’s parent company, broke the news in its 2012 interim results announcement.

City Link’s recovery plan has been driven by a new management team whose focus has been on improving driver productivity, supported by better route handling.
Falling costs

This has resulted in City Link's costs per delivery falling by 13% over the year, while volumes grew by 17%.

Revenues grew by 4.8% in the year. The company is pushing through another £15 million in price increases this year (of which £14 million will be in the first quarter), primarily from its high-volume B2C customers.

The price increases will not affect B2B customers.

Revenue per consignment fell by 10% due to the volume shift from B2B to lower profit B2C customers. Focus for 2013 is on acquiring and retaining more profitable small and medium sized businesses.

Key priorities for 2013 include product enhancements such as estimated time of arrival, cage tracking and embedding end-to-end scanning.