Parcel volumes up 10% at UK Mail Group in first quarter

UK Mail Group said yesterday its parcel volumes are up 10% compared to last year. The company issued an interim statement with guidance on its first quarter performance, stating that it has been a “solid start” to the financial year.

The Midlands-based mail and parcels carrier said its first quarter revenue grew by 2.5% compared to the same period last year, or 4.5% when adjusted for the one less working day during this year’s first quarter.

The parcels business saw growth once again driven by online shopping and home delivery, with the company’s volume mix continuing to shift towards more business-to-consumer deliveries.

However, the company warned that it had capacity constraints, in part caused by its move to a new and expanded national hub near Coventry, and as a result is expecting parcels growth to moderate in the rest of the year.

The new hub, which will see automation rates increase substantially for UK Mail’s parcel operations, is on track to be operational from May 2015. The company is relocating because its existing hub in Birmingham is situated where the planned new High Speed Rail project will be built.

Meanwhile, UK Mail’s mail business saw daily volumes up “slightly” from last year’s first quarter, with expectations of “good” volume growth later in the year on the back of new contract wins.

The Group’s courier and pallet businesses also saw revenue increases in the first quarter, the company said.

“Excited”

In its statement, the company commented, “With the strength of our market position, a well invested, integrated and automated network, and a growing suite of innovations and industry-leading products and services, we remain excited about the medium term growth prospects for UK Mail.”

UK Mail Group achieved a turnover of £508.5m during its last full financial year, up to the end of March 2014, which was 7% up on the previous year. Its pre-tax profits during the year was £22.8m, up 28.2% on the previous year.

The business collects about 200,000 parcels and 11.5m items of mail each day, delivering parcels direct to homes and businesses, while delivering mail via Royal Mail’s last mile network.

Parcels account for about 43% of group revenue, while mail represents about 48%.

The Group has a network of 52 sites across the country, a work force of 2,800 staff and a fleet of 2,206 vehicles including subcontractors.