UK Mail Group has released a pre-close trading update for the financial year ended March 31, 2015. It reported that group revenues for the fourth quarter are expected to show an increase of some 5% year-on-year, giving total reported revenue growth for the financial year of some 1%. These figures exclude the figures from the Pallet business which ceased operations in 2014.
The Parcels business continued to deliver a good performance, with volumes for the fourth quarter increasing by around 12% year-on-year, partly driven by new account wins as a result of the collapse of City Link.
This increase in volume experienced during the final quarter took parcel volumes temporarily above effective operational capacity, resulting in above normal operating costs being incurred in the fourth quarter of the financial year. UK Mail states that it expect this to continue into the first half of the new financial year, however it expects the increased volume to be absorbed effectively when it moves to a new hub in Ryton, UK, in mid-2015.
The Mail business achieved 5% year-on-year volume growth during Q4, leading to a rise in revenue. This growth was driven by customer retention and new business wins, which have further increased the company’s share of the downstream access market.
In contrast the Courier business saw a decline in revenues in the fourth quarter, although it did achieved revenue growth for the full year.
Guy Buswell, Chief Executive of UK Mail said, “UK Mail is undergoing a period of significant investment and transition to make us one of the leading players in our markets, with continued product and service innovation and a new fully automated hub, which will create extra capacity and reduce operating costs across our network. The medium and long term outlook for the Group therefore remains very positive.”
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