Severe weather hits profits at UK Mail
UK Mail Group said that its business remains “strong” despite December’s bad weather hampering profit margins. During the third quarter, the Group’s underlying volume growth was lower than expected throughout its parcels, courier and pallets businesses.
The company said that this was further compounded by the snow that caused major disruptions to operations.
A company statement said: “Whilst we were able to manage our operations such that over 99% of our Christmas parcel deliveries were delivered before Christmas, the weather meant that we incurred additional cost in our network to hold and deliver consignments.”
Overall, UK Mail’s parcels business increased its revenues marginally in the quarter, with revenue growth in the initial weeks of the quarter offset by the reduction in December.
Furthermore, its mail business saw good revenue growth throughout the quarter, as it continued “to gain additional mail volume from existing customers, together with new business wins”.
The result of these factors is that, whilst overall Group revenues for the quarter increased by approximately 4% year on year, the company now expects Group profit for the full year to be below previous expectations and broadly in line with last year.
“We remain cautious about the economic conditions. However, the adverse factors experienced during the quarter were largely one-off in nature and our business remains strong relative to our competitors and well positioned in its various markets,” said a company statement.
