UK Mail sees margins slip

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Operating profit at the UK Mail group fell eight per cent to £6.8m for the first half despite a 5.7 per cent rise in sales.

The Mail business continued to grow strongly with sales up 9.2 per cent to £93.8m but operating profit was down 9.3 per cent at £5m. UK Mail blamed a price rise from Royal Mail for much of the fall.

Top performer was the pallets business which reported a 14.7 per cent rise in operating profit to £1m despite a small fall in sales.

Hardest hit was the parcels business which saw operating profit fall 14 per cent to £5.6m despite a three per cent rise in sales to $83.5m.

However, the group pointed out that owing to the fixed cost nature of the parcels business, the impact of one less working day reduced operating profit by some £0.4m with an impact on the operating margin of some 0.4 per cent.

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