Godman leaves City Link
Stuart Godman has stepped down as managing director of City Link.
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City Link: Q1 2010 Trading Update
City Link’s adjusted operating loss of £4.4m is £1.7m better than the corresponding loss in Q1 2009 but was negatively impacted by high sub-contractor costs. Revenue declined by 1.8% but is in line with plan.
Read MoreCity Link parent pledges to turn fortunes around
The boss of Rentokil Initial – parent company of City Link – has vowed to turn around the fortunes of the parcel delivery firm, despite Rentokil receiving “numerous offers” for City Link.
Alan Brown, who became chief executive of Rentokil in March, says he is pleased with the progress City Link is making at improving its customer service levels and confident the parcels firm can return to profitability.
City Link posted an operating loss of GBP 15.4m for the three months to the end of March.
At the same time, Rentokil Initial revealed its first quarter operating profit dropped to GBP 28.7m, from GBP 54m the previous year.
City Link has experienced integration problems following its merger with Target Express last year. The process is expected to be completed by the end of this year.
Brown says City Link’s turnaround plan will focus on improved customer service, integrated information systems and an optimised hub and depot network.
He adds: “We have broken the back of the operational problems, but there is still a long route back”.
In February, Petar Cvetkovic was appointed City Link’s new managing director.
Read MoreBusiness Post has 10 pct of UK mail
Business Post, the parcel and mail delivery group, is now handling one in 10 mail items posted in the UK after winning contracts to deal with letters and packages for large business mailers.
MBNA, the credit card company, and Norwich Union, Britain’s largest insurer, were among new customers for the group’s UK Mail postal operation, contributing to an increase in its share of the retail mail market from 7.5 per cent to 10 per cent in the last quarter of 2007.
UK Mail collects and sorts post from bulk mailers, before handing it over to Royal Mail for delivery over “the final mile” to homes and businesses around the country. Other customers include BBC TV Licensing, Carphone Warehouse, Royal Bank of Scotland and the Department for Work and Pensions.
Mail revenues during the three months to December 31 were up 60 per cent on the previous year, the group said in an interim management statement following the close of its third quarter.
The parcels arm also grew over the quarter with underlying revenues up 6 per cent. This contrasted with the experience at Rentokil Initial, which blamed falling volumes at its City Link parcel delivery service when it issued a profits warning in December.
Business Post shares have fallen from a high of 514p in June, closing on Wednesday at 250½p, up 12p.
The group will report results for the year to March 31 on May 21.
City Link H1 profits and revenues up strongly
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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