Connect Group reports 1.3% drop in revenues
Connect Group has reported a revenue of £1,497.5m for the year to date, which is down 1.3% on 2016.
In a trading update issued today (24 July), Connect Group attributed the drop to “the anticipated decline of newspaper and magazine sales, offsetting revenue growth in other markets”.
Smith News saw its revenue drop 4.1% to £1,125.8m (2016: £1,173.7m) decreased by 4.1% with newspapers continuing to perform more strongly than magazines. Connect Group commented: “Media total revenue of £24.7m (2016: £23.2m) has increased by 6.1%. Planned efficiencies of £5m in the year will be fully delivered, and a robust operational performance with ongoing cost control, is contributing to a strong second half. The new regional hub at Hemel Hempstead is operational and making good progress.”
The Group’s Parcel Freight revenue was up by 4.0% to £157.3m, driven largely by price increases.
“Despite a successful spring peak for consignment volumes,” said Connect Group, “market competition is limiting revenue growth, and the efficiency benefits from our investments in the business are coming through more slowly than anticipated. As a consequence, overall performance has followed the same trend as the first half of the year.”
Pass My Parcel has continued to see an increase in volume, which was attributed to “a combination of core growth, new client partnerships and the development of additional services”.
“Total parcels handled in June 2017 averaged 23,400 per week, up 149% on the same period last year.,” commented Connect Group. “Customer service and operational performance has remained strong throughout.”
Connect Group added: “Good progress is being made in leveraging the Group’s capabilities in B2B final mile and early-morning delivery, attracting a growing client pipeline with a range of service propositions. We expect our contract with UK Mail to handle returns and failed household deliveries to commence in 2018, following the implementation of supporting IT.”
