Tag: Mail Services

Best Buy enters Europe with Carphone retail deal

Posted by | May 8, 2008 | |

Best Buy, the world’s biggest electronics retailer, is to pay USD 2.1 billion for half of Britain’s Carphone Warehouse chain to take on the European consumer electricals market.

The deal creates a joint venture business that will compete with DSG International, formerly called Dixons, and Kesa which owns the French group Darty.

Carphone and Best Buy estimate the size of the European market for consumer electronics to be around 89 billion pounds (USD 174 billion).

The pair said the 50-50 owned company would target a growing appetite for consumer electronics, but analysts said the pair are entering a tough market where the incumbents are struggling.

Europe’s biggest independent mobile phone retailer Carphone’s existing 2,400 stores will continue to operate under the Carphone Warehouse and Phone House brands in its nine European markets, and from 2009 the new company will roll out larger stores under the Best Buy name.

Analysts said Best Buy would bring its understanding of the consumer electronics market to Europe, a region it has long wanted to enter, but cautioned that it could take some time to roll out the stores and secure a strong presence.

Best Buy sells consumer electronics, home-office products and entertainment software in the United States, Canada and China. The new company will open Best Buy stores in Britain and other European countries but officials of both companies would not be drawn on numbers.

Best Buy said the venture was expected to be funded through a combination of cash on hand, existing bank lines and other borrowing. It also said it now did not expect to repurchase shares under its existing repurchase program in fiscal 2009.

Best Buy said it expected the deal to add around USD 5 billion to fiscal 2009 revenue. Its 2008 sales are forecast at around USD 43 billion.

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Postbank reports positive Q1 figures (GER)

Posted by | May 8, 2008 | |

Deutsche Postbank AG is reporting positive results and further growth in its operating business in the first three months of 2008.
The Bonn-based bank increased sales of checking account and savings products and generated a record high number of new private loans in the first quarter, as well as improving its core operating figures – net interest income and net fee and commission income – as against the same period of the previous year. By contrast, net trading income and net income from investment securities declined due to the effects of the capital market crisis.
In the first three months of 2008, profit before tax fell by 25.2 pct year-on-year to EUR 166 million as a result of the turbulent market environment. Accordingly, the return on equity before taxes also declined from 17.0 pct at March 31, 2007 to 13.2 pct at March 31, 2008. The cost-income ratio improved from 69.4 pct to 73.9 pct in the same period, while the figure for Postbank”s traditional banking business (excluding Transaction Banking) rose from 67.3 pct to 71.8 pct.
In the first three months, Postbank increased the number of free checking accounts sold by 133,000 or 13.7 pct. At the end of the quarter, the Bank managed a total of 4.9 million private checking accounts for its customers. The strategic focus on value-oriented volume growth in Postbank’s savings business, which was announced in late 2007, also started to bear fruit: the volume of traditional savings deposits increased by around EUR 0.5 billion as against year-end 2007 to total EUR 44.4 billion.
The home savings volume also developed positively despite the downturn in the market as a whole, with a new contract volume of EUR 2.81 billion in the first three months of 2008 – up 2.4 pct on the same period of the previous year.
Postbank recorded the highest volume of new private loans since the launch of its Privatkredit product, with a year-on-year increase of almost 73 pct to EUR 380 million. At EUR 2.46 billion, the total private lending volume at March 31, 2008 was 7.4 pct higher than at the end of 2007.

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Royal Mail Group delivers robust financial results in the face of many challenges in the year ended 30 March 2008

Posted by | May 8, 2008 | |

• Group external revenue of GBP 9,388million, up 2.3pct

• Group operating profit before exceptionals of GBP 162million, down 30.4pct

• Royal Mail Letters recorded a loss of GBP 3million due to a sharp decline in mail volumes, the continuing impact of full competition and increased levels of investment

• The Universal Service made an estimated loss – for the first time – of around GBP 100million with the overall price controlled area of Royal Mail’s business making a loss of around GBP 200million

• GLS and Parcelforce Worldwide saw a significant rise in revenues, with profits remaining constant due to increased, volume-driven costs and competitive pressures

• Post Office Limited recorded an overall loss of GBP 34million, this was an improvement due to the full year impact of the Social Network Payment

• Landmark agreements on pay, pensions and modernisation

• Cash contribution by the Company to Pension Plan of more than GBP 800million

Commenting on these results Adam Crozier, Royal Mail Group’s Chief Executive, said:

The results are dominated by the profit fall in the Letters business where overall market volumes have declined by 3.2pct year on year in line with other major European postal markets. Royal Mail Letters is handling three million fewer letters a day than a year ago, and revenues have fallen further as customers down-trade to lower priced products and rivals handle increasing volumes. The company is also continuing to pay huge sums into the Royal Mail Pension Plan – more than GBP 800million in cash last year. A key achievement of last year, however, was to put in place and agree with a strategy to modernise and transform the Letters business with heavy investment in our people and technology that will deliver efficiencies and provide the platform for new and more flexible products for customers – alongside the agreement on major pension reform which took effect on 1 April 2008.

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Mail volume decline at Royal Mail could get worse (UK)

Posted by | May 8, 2008 | |

Falling mail volume has been blamed for a USD 707m loss in the States by US postal service, the American postal operator, and a similar problem is likely to affect mail volume at Royal Mail this year.

Increased fuel prices, a drop in bulk mail from housing and credit markets have all added to US postal serviceSlosses during its fiscal second quarter, despite cost-cutting measures and efficiency improvements.

Mail volume is decreasing year on year for many postal operators but the present ‘credit crunch’ is likely to hit postal operators across Europe particularly hard as advertisers cut back on expensive mailshots in what is becoming a tough time for economies.

The UK has reported a slow-down in the market for detached homes in the GBP 500,000+ bracket and with new mortgages more difficult to obtain, expenditure on mail-outs in the sector is likely to fall but credit houses which make up a large percentage of bulk and junk mail will see far greater decline.

A rapid drop in mail volume would be bad news for Royal Mail which is already experiencing an annual decline in mail volume of around 2 pct as well as trying to clear the GBP 3.4bn pension deficit over some 17 years. Profits fell by a third last year to GBP 223m through the cost of strike action and contracts lost to competitors.

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