UK Mail expects to see revenue decline for the year
UK Mail Group has advised that it expects to see a decline in revenue for the financial year. In a statement issued yesterday (6 April), UK Mail said: “Reported Group revenues for the year are expected to show a 1% decrease for the financial year. Profit before tax (before one off exceptional items) for the year is anticipated to be in line with management expectations.
“Overall revenue growth has been impacted by a continued mix effect in our Mail business which is expected to result in a revenue decline for the year of some 3%, despite Mail volumes for the year being up some 5% on the previous year.”
The company statement continued: “Our Parcels business is expected to achieve volume growth for the year of some 4%. Volume growth in the fourth quarter has suffered in comparison to last year due to the spike in volumes in the comparative period as a result of the demise of City Link.
“Service levels in both our Parcels and Mail businesses remain at high levels. Our new automated hub continues to operate well and to achieve good throughput levels. We are making further progress with our plans to improve the efficiency of our network in markets that remain highly competitive.”
As previously reported, the UK Mail’s recent results have been affected by the transition to its new national parcel hub in Ryton, near Coventry. In November, Guy Buswell resigned from his position as Chief Executive.
UK Mail Group will report its final results for the year ended 31 March on 24 May.
In related news, Peter Fuller joined the UK Mail Group as Operations Director on Tuesday (5 April) and will join the Board on 17 May.
Commenting on the UK Mail statement, Connor Campbell, a senior market analyst at www.spreadex.com, said: “Despite revealing it expects to see a drop in revenue for 2016 UK Mail managed an unlikely 2% rise this Thursday, even with the company warning that parcel volumes had suffered in the fourth quarter, investors perhaps relieved that Cantor Fitzgerald reiterated its ‘Hold’ rating on the stock rather than downgrading it in light of its weak figures.”
