Business Post rivals say they are growing
Business Post and chief executive Paul Carvell were in the eye of a parcels sector storm this week. At issue is the degree to which its high-profile problems are specific to the company and how much they reflect a downturn in the sector. The group has been under intense scrutiny as the only pure parcels firm to be publicly traded, and stock market sentiment is clear; the share price has plummeted from a steady 690p to just 320p as the group rushed out earlier-than-expected interim results and with them a second warning on profits in seven weeks. Carvell says year-on-year volumes are falling for the first time in the firm’s 34-year history. The decline reflects the market, he says, and rivals are said to have emailed him messages to that effect when he had to issue a profits warning on September 21. Group chairman and 62% shareholder Peter Kane says in his interim statement that market conditions have deteriorated since then, and that daily volumes are marginally below last year’s. Press comments said the results would be unhelpful to Target Express, which has a stock market flotation as a possibility for next year. Rivals’ reactions on Tuesday were mixed. ANC Group chairman John Brotherton said Business Post’s view is “a lot glummer than we see the market place”. It will continue to be tough in the short term but year-on-year volumes are up, including this month, he said. Tom Bell, MD TNT Express UK & Ireland said that in certain sectors of the parcels market, volumes are down. The answer is to sell harder and more. “You have got to get the right product mix and yield management,” he says. “We will produce a record year of profit in the UK, with 6.5% (financial) growth.” Industry sources suggest that Geodis-owned Parceline has also shown growth. Quentin Abel, MD at APC Overnight, said analysts’ full-year forecast of (pounds sterling)14m profit at Business Post “is still a damn fine performance”. “Individual customers are less busy so one could conclude that the market is down. But we are still growing, albeit by less than expected,” he said. Target CEO Petar Cvetkovic says there is still room for growth with high service quality. Target has grown 3.1% year-to-date, he says. Reports that Business Post lost a contract with Walsh Western to deliver Dell computers to homes are wrong, both sides told MT on Tuesday.
