Tuesday 27th Sep 2016 - Logistics Manager

UK Mail sees growth in B2C parcels

UK Mail Group, which issued a profits warning in August, is now trading in line with its revised expectations with growth coming particularly from the B2C sector, it said in a pre-close trading update.

In August, the company said parcel volumes for the first four months of the new financial year were some four per cent up on last year, but the move to its new automated hub at Coventry had caused “a greater level of customer churn and loss of volume than anticipated, with an associated adverse impact on parcels revenue mix”.

In its latest update, CEO Guy Buswell said: “We are focused on executing the plan we have put in place to address the recent challenges associated with our Parcels business. Progress to date has been encouraging and an update on this will be provided at the interim results in November.”

Reported group revenues (for continuing operations) for the first half increased by some 4 per cent compared with the same period in the previous year.

In the Parcels business, average daily volumes for the first half increased by some 8 per cent compared to the same period last year. “We are now achieving improved rates of parcels volumes growth. This increase continues to be weighted towards B2C customers, related to the growth in online shopping.”

In the Mail business, average daily mail volumes were some 8 per cent ahead of the same period last year.

Buswell said: “We remain confident in our medium and long term prospects and in the operational benefits that our new fully-automated hub will bring, with a number of significant new customers keen to use our services as a result of this investment.”