UK Business Post to target SMEs to help boost struggling parcel business
The finance director of Business Post Group PLC said it will take a year before there is a ‘significant improvement’ in the mail company’s struggling parcel business.
In an interview with AFX News, Peter Fitzwilliam said the parcel business would focus on targeting small and medium-sized companies, rather than larger companies, which he said was a better use of its resources.
‘Its more efficient to have a wider spread of customers rather than a (smaller number) of bigger ones,’ he said. ‘We need to re-balance the sales mix and target SMEs. This will create operational improvements.’
Fitzwilliam was speaking after Business Post issued its second full-year profit warning in three months, saying an expected improvement in profit margins at its Parcel Services business had not materialised.
It said pretax profits for the current year to March 31 would be only 9 mln stg.
The company’s new chief executive Guy Buswel, who was appointed last month, has made changes to the management of the group’s operations but Fitzwilliam said it will take time to improve the performance of its parcel business.
‘It will probably take a year to improve the performance of the parcel business,’ he said but ruled out job cuts.
He stressed the company’s mail business remained strong, helped by a joint agreement with the Royal Mail. Under the agreement Business Post collects, sorts and moves mail around the UK, leaving the Royal Mail to deliver the mail.
‘The mail market is looking extremely good,’ said Fitzwillliam. ‘It has a market value of about 5 bln stg and although we only have about two pct of this we are growing fast.’
At 9.38 am shares in Business Post were down 39-1/2 pence, or about 9.5 pct, at 370 pence, valuing the company at 201.4 mln stg.
