Business Post wants Royal Mail segregation (UK)

Parcels to post group Business Post hit forecasts for last year with good growth in its UK mail arm and a recovery by its parcels division.

Revenues grew by 10.1% to GBP 358.6m with profit before tax at GBP 14.2m, up 44.9% on last year. This profit increase was achieved despite the termination of the Federal Express contract in April 2007 Business Post said. Adding that back, revenue rose by 16.5%.

UK mail revenues jumped by 52% to GBP 137m with profits up by 56% to GBP 10m. Business Post added it has written to the government’s review of the postal market suggesting that the selling and distribution elements of Royal Mail be segregated. “We believe this proposal will incentivise the Royal Mail network to become more efficient and profitable,” it said.

Revenues in Parcels were up 2% for the year on a like-for-like basis (excluding FedEx). Reported revenues were 7.2% lower at GBP 179.8m (2007: GBP 193.8m). Parcel’s operating profit increased by 2% to GBP 15.4m. Specialist Services operating profits reduced by 35% to GBP 1.3m as the courier business was reorganised.

The start of the new financial year has been encouraging with trading in the early weeks in line with management’s expectations. The dividend for the year is unchanged at 17.2p.