UK Mail has announced that it plans to close its non-core subsidiary UK Pallets Ltd. The closure follows a period of declining profitability.
The company has stated that this process will be managed over three months, ensuring that all employees and customers are supported. It is hoped that a number of employees would be able to take up alternative roles within UK Mail.
The estimated cash costs of closure is approximately £1m, with asset write downs of £2m, including the residual goodwill that arose on acquisition. These will be treated as exceptional items.
Pallets is the group’s smallest business, contributing 5.3% of group revenue and 2.3% of group operating profit in the year to March 31, 2014, and is run separately from the Parcels, Mail and Courier operations.
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