British Delivery Firm Faces a Slowdown in Its Computer Division
British Delivery Firm Faces a Slowdown in Its Computer Division
From KNIGHT RIDDER TRIBUNE, May 23rd, 2001
By Robert Lindsey, Evening Standard, London Knight Ridder/Tribune Business News May 23–Shares in parcels delivery group Business Post dropped 9 percent today as it warned first-half growth would be hit by slowing demand from its hard-pressed computer hardware customers.
But it insisted a contract with American giant FedEx would see it back on track by the second half.
New chief executive Paul Carvell said: “We’ve been trying to limit our exposure to pure dot coms. It’s mainly computer hardware that we deliver, largely business to business but some to homes.” This market, booming for the past few years, began to flatten at the beginning of the year. However, Carvell said the fall-off would be only temporary since, come September, Business Post will begin delivering parcels for FedEx to all the places in Britain the US company does not reach. It says this deal should bolster its revenue by 10 percent . The group has also been cashing in on the Royal Mail strike by carrying its customers’ priority first class mail over the past few days. Even though Royal Mail staff have gone back to work today, they will be struggling with a huge backlog for the next few days, Carvell said. Profits for the year to 31 March fell 23 percent to UKpound 12.7 million despite turnover that grew 8 percent to UKpound 124 million. The group was hit by rising fuel costs and low revenue growth in the first quarter, but margins improved in the second half after costs were brought under control. It is holding the total dividend at 15.1 pence. The shares fell 211/2 pence to 220 pence.
