Tag: Domestic

City Link H1 profits and revenues up strongly

Posted by | Aug 23, 2007 | |

and profits in the first half of 2007 following its acquisition of rival Target Express and due to good organic growth ahead of the overall market, parent group Rentokil Initial announced in its interim report today.

The parcels firm, which claims to be one of the domestic market leaders, increased half-year revenue by 148.5 pct to GBP 203 million (EUR 300 million) from GBP 81.7 million in the first half of 2006. Excluding acquisitions, organic revenue growth was 9.7 pct compared with estimated market growth of 4 pct, the group pointed out.

City Link improved half-year adjusted operating profit by over 75.9pct to GBP 24.1 million, representing a profit margin of 11.9pct. Second-quarter figures were similar, with revenue up 127.9 pct and adjusted operating profit up 73.8pct.

In 2006, City Link had an operating profit of GBP 32.6 million on revenues of GBP 213.3 million. The company bought Target Express in November 2006 and a number of franchise operations during 2006 and 2007.

City Link’s B2B revenues, which account for about 70 pct of its network turnover, were strongly ahead of last year during the first half, the group said in its half-year report. However, there was evidence of some down trading and slower sales growth in the B2C segment in the early months of the year.

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Courier Companies want government to relook at PO amendments

Posted by | Aug 23, 2007 | |

Private courier companies have approached telecom minister A Raja demanding that the government hold fresh consultations with the industry before finalizing amendments to the Indian Post Office Act.

Private courier companies are opposed to the proposed amendments to the Post Office Act as it bars them from carrying letters and parcel below 150 gm and also seeks to limit foreign direct investment in the sector to 49 pct. The Bill also envisages that private courier companies who want to deliver letters below this slab (150 gm) be imposed a price multiple, which is five times more than the rates charged by India Post or 2.5 times of Speed Post rates.

The ECI response comes at a time when the ministry of communications under telecom minister A Raja has revived work on amendments to the controversial postal bill. At the same time, the communications ministry is yet to take a call on whether the Bill would be introduced in the current session of parliament. Faced with strong protests from private courier players, the government had put the issue on the backburner for the last two months

Private courier companies also want the government to renegotiate on key issues like creation of a regulator for the postal sector called Mail Regulatory Development Authority and also on the proposal that mandates large courier companies to pay 10 pct of their total revenues as universal social obligation fee as in the telecom sector.

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Competition is helping the mail industry adapt to a fast-changing communications

Posted by | Aug 23, 2007 | |

Postcomm, the independent regulator for postal services, has called on Royal Mail to continue to raise its game and urged all operators to promote the strengths of mail versus other communications media, as it published the emerging themes from a far-reaching review of its regulatory strategy.

During the past year, Postcomm has asked for views on the future of postal services in the UK. The regulator will use these to help frame its regulatory strategy in the lead up to 2010 and beyond.

The principal theme of the review, on which Postcomm is now seeking feedback, is that mail operators must make the most of the opportunities presented by the changing mail market.

– Customers are benefiting from competition
– More innovation is needed in order to exploit the changing mail market
– Postcomm reaffirms its aim to move to less detailed regulation
– The universal service will be secured in a changing mail market

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Royal Mail wants price cut for businesses

Posted by | Aug 23, 2007 | |

Royal Mail is pressing the industry regulator, Postcomm, to make radical changes to the universal service obligation, under which it must deliver mail to all the UK’s 27 million addresses for the same price. It wants business post taken out of the deal to allow it to charge less for franked mail.
Postcomm is conducting a wide-ranging strategic review of postal services as competitors battle Royal Mail for a share of the market and all mail providers face a growing challenge from new communications media such as email. The review covers competition, innovation, regulation, governance and the structure of the universal service.
Royal Mail’s proposals were revealed last Thursday 23rd August in Postcomm’s interim report on the review. The regulator, which has allowed changes to the universal service in the past, gives a cautious response to the plans. It acknowledges that removing business mail from the deal would help Royal Mail to be more commercially flexible. But it notes: “We believe that to manage some potential risks, a phased approach might be an attractive way forward.”
One concern is that Royal Mail’s proposals could harm small businesses unable to take advantage of competition in the bulk mail market. “We need to ensure the service remains aligned with changing customer needs and the economic costs of providing it,” Postcomm says. “The basic right to post a stamped letter anywhere in the UK for the same price will remain at the centre of the universal service.”

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Royal Mail needs 'radical change'

Posted by | Aug 23, 2007 | |

Royal Mail’s survival depends on major initiatives to slash costs, such as contracting out part of its operations, according to a Postcomm report.

The UK mail service regulator called on Royal Mail to introduce radical measures to modernise its business so that it could face more competition.

Royal Mail has been losing market share to rivals since it ceased to be a monopoly in 2006.

The group is currently involved in a bitter pay dispute with its workers.

A number of strikes since June have disrupted the UK postal service as the Communication Workers Union battles for a bigger wage settlement than the 2.5 pct pay rise on offer.

Union officials are also opposing large-scale changes to the Royal Mail, which would see greater use of automation in sorting mail. This could lead to an estimated 40,000 job cuts, they say.

In its report on the future of the mail market beyond 2010, Postcomm blamed Royal Mail’s financial troubles on rising labor costs and significant pension scheme obligations.

In 2010 Royal Mail’s current pricing agreements will come to an end.

Declining market volume and discerning purchasing by customers has also contributed to to reducing profitability at the group from GBP 159m in the first six months of 2005-06 to GBP 22m in the first six months of 2006-07, the regulator observed.

It raises the possibility of Royal Mail franchising out some of its sorting, delivering or collections operations to keep costs down. Similar solutions have been found by national mail operators in Germany, US, Australia and New Zealand.

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