Business Post sees FY pretax pre-ex of 10.5 mln stg

Business Post Group PLC said it expects to post a pretax profit before exceptional items of 10.5 mln stg in the year to end March.
However it said one-off costs incurred in converting some underperforming franchises to Business Post ownership will result in a higher charge than previously expected.

The conversions will result in a charge of about 2.7 mln stg, up from the 1.5 mln stg announced on Jan 27.

Total exceptional costs in the current financial year, including the additional 1.2 mln stg of exceptional costs, will be about 6.9 mln stg, it said.

The reclassification of an exceptional item changed the company's earlier estimate of pretax profit before exceptionals of about 9 mln stg that was given on Jan 27.

'The board is confident that the major underlying issues affecting profitability are being addressed and, as a result, expectations for the year to 31 March 2007 remain unchanged,' the company said.

It also said it renewed a major long-term contract with FedEx Express.

Business Post's existing five-year contract will be replaced with a new five-year contract, with effect from Sept 3, on similar commercial terms.

UK Mail continues to trade ahead of the board's expectations, winning significant levels of new business in both the pre-sorted and unsorted markets, it said.

The group's results for year to end March will be announced on May 23.

Business Post overhaul set to boost profits
Birmingham Post, First, Sec. News, p 25 04-01-2006
By By John Revill Business Staff

The "root and branch" overhaul of Birmingham logistics firm Business Post has made good progress, it said yesterday, repeating expectations of annual profits around the pounds 9 million mark.

But the troubled company, which has its national HQ near Bromford Lane, said one-off costs incurred in converting some underperforming franchises to Business Post ownership would result in a higher charge than previously expected.

The conversions will result in a charge of about pounds 2.7 million, up from the pounds 1.5 million announced on January 27.

Total exceptional costs in the current financial year, including the additional pounds 1.2 million, will be about pounds 6.9 million, it said.

The firm has already issued two profits warnings in November and January when the expected pick up in margins at the parcels services business failed to materialise.

The pounds 9 million profit figure – before tax and exceptionals – was some pounds 4.5 million below expectations.

But Business Post said the management team, led by new chief executive Guy Buswell, had achieved improvements in service quality, although these would take time to seep into profits.

It said its consumer delivery operation UK Mail continued to trade ahead of expectations, winning significant levels of new business in both the pre-sorted and unsorted markets.

"The board is confident that the major underlying issues affecting profitability are being addressed and, as a result, expectations for the year to March 31 2007 remain unchanged," the company said.

It also said it had renewed a major long-term contract with FedEx Express.

Business Post's existing five-year contract will be replaced with a new five year one, with effect from September 3, on similar commercial terms.

Meanwhile the Warwick based automotive engineering group Wagon said current trading remained in line with the board's expectations, with the near-term outlook on European automotive volumes still uncertain, particularly with French OEMs.

Nevertheless, management initiatives to reduce the cost base and improvements in the operating performance had continued to strengthen the business, Wagon said.

"Overall, trading remains broadly in line with expectations for the current year and the board is confident that the group's focus on business development together with the rigorous management approach and strategic operational developments in Spain, Italy, China and the Czech Republic will deliver long term growth."

Analysts expect profits of pounds 15 million on sales of pounds 400 million, down from pounds 19 . 7million on pounds 450 million sales last year.

The EGM of Wagon shareholders to approve the pounds 128 million acquisition of privately owned French rival, the automotive component maker Oxford, will be held next Thursday.

Finally, in the trio of statements, the newly floated research company QinetiQ said early trading was in line with expectations.

The firm, which has a major centre at Malvern, was spun out of the Ministry of Defence's high tech research operations last month.

A total of pounds 95 million in additional contributions has been made in the second half of the year to reduce the group's pension fund deficit.