UK Mail’s new hub is now “working effectively”, according to chairman Peter Kane, and the company performed well during the peak Christmas trading period, maintaining customer service levels even as volumes continued to increase.
The company, which parted with chief executive Guy Buswell in November, performed in line with expectations for the three months to 31st December, it said in a trading statement. “Therefore our expectations for the full year profit remain unchanged.”
Problems with the move to a new hub hit profits in the first half of the year. UK Mail reported a 55.5 per cent fall in operating profit to 4.9m for the six months to 30th September despite a 4.5 per cent rise in turnover.
The company said at the time: “The profit reduction is primarily due to the temporary increase in operating costs associated with this [the move] and also due to a magnified mix effect as a result of the increased customer churn we experienced in the period.”
UK Mail decided to move to a new automated hub at Coventry because its site in Birmingham is on the route of the new high-speed rail link.
However, in the third quarter, said Kane: “Our new hub is now working effectively and delivering good service levels to our customers. We need to build on this base as we move forward into 2016. The key challenge is to drive the planned efficiency savings from the hub while further developing our customer offering.”
The parcels business delivered volume growth of some eight per cent compared to the same period last year. Volume growth in the third quarter was again largely driven by an increase in Internet shopping related home deliveries.
The mail business achieved two per cent growth, although due to mix effect, revenues were down compared to the same period last year.