UK Mail Group’s growth slows in third quarter
UK Mail Group has achieved a “good performance” over its peak season, but the company has seen its growth slowing compared to the first half of the year. The Birmingham-based company issued an interim management statement today showing results in the three months up to the end of December in line with expectations, with Group revenue growing 6% compared to the same period in 2012.
Parcel volumes were up 15% year-on-year in the quarter, continuing the shift towards business-to-consumer volumes thanks to Internet shopping.
UK Mail said it also achieved a further growth in mail volumes.
But, the result represented a slowing of growth compared to the first half of the year, when Group revenues were up 7.9% year-on-year and parcels growth was 21.4% year-on-year.
UK Mail said the “moderated” growth was as expected, the comparison reflecting a particularly high period of growth last year.
The company said this year’s peak volumes were handled thanks to investment in the network. As e-commerce drove demand up to Christmas, UK Mail said it was able to maintain customer service levels through the busy period.
Guy Buswell, the chief executive at UK Mail, said: “It is clear from weekly volume patterns that shoppers were, more than ever before, leaving their online Christmas shopping to the last minute, as consumers increasingly trust that online deliveries will arrive on time, as promised. This underlines the importance of our leading consumer-friendly services in which we continue to invest.”
“Good progress”
UK Mail generates about £475m in revenue each year through its network of about 50 sites, and in the last full year (ended 31 March, 2013) achieved a £13.5m profit after tax. Mail represented 51% of the business last year, parcels 40%, with the balance moving in parcels’ favour.
The company has recently received planning permission to build a new 200,000 sq ft central hub near Coventry. The hub will replace the current facility in Birmingham, which is in the planned route for the government’s High Speed Rail (HS2) project, and will allow UK Mail to improve its automation rates for parcels.
Another development on the way is the introduction of a one-hour delivery window for parcels, which is expected to launch this spring, Buswell confirmed.
Meanwhile, the Group’s courier business continued its slight decline in revenues during the third quarter, while the pallets business continued its slide, although the company said it was investing in its pallets network in order to return to previous sales levels.
Overall, UK Mail told investors it remains in a sound financial position.
Buswell said: “We are making good progress with the strategic investment in our business.”
