FedEx contract update
Business Post Group plc announces that, further to its statement on 18 December 2006 regarding FedEx Corporation’s intention to terminate the Group’s contract as its Global Service Participant in the UK, the terms of that termination have been satisfactorily agreed. The contract will now terminate on 30 April 2007 with the people and dedicated assets related to the contract and associated costs being transferred to FedEx. This early termination avoids the potential for an increasingly unprofitable run-down of the contract over the full term of the original notice period.
In the year to 31 March 2007 the FedEx contract will generate revenue of approximately GBP19m, and a profit contribution of some GBP2m. Business Post will incur an exceptional cost in the current financial year of some GBP1m relating to contract exit costs.
Guy Buswell, Chief Executive of Business Post, said:
“We are pleased to have reached an agreement with FedEx. We wanted this early termination to allow us to focus our resources immediately on the development of the new, longer term opportunities now open to the group,”
