UK Mail in ‘strong’ 4.8% profits rise

Royal Mail rival UK Mail has revealed an increase in Group profit of 4.8 per cent for the six months ending September 30 2010.
Profit before tax reached £7.4m, compared to 2009 levels of £7m. Group revenues were up 1.3 per cent to £190.7m (£188.2m in 2009). Mail revenues rose to 1.5 per cent to £85.9m (£84.6m), while parcels revenues increased 1.3 per cent to £81m (£80m).
By comparison Royal Mail recently revealed its operating profits over the past six months have slumped by 72 per cent, from £184m to £52m. Its letters business lost £66m over the six months to September – compared with a profit of £48m over the same period last year.
UK Mail said that its balance sheet was “strong”, as it revealed that it had £8.5m in net cash in the bank, compared to £3.6m last year.
Chief executive Guy Buswell said: “The Group has delivered a satisfactory performance in the first half, with continued revenue and profit growth and our new products and services making good progress.
“In Mail, we are targeting revenue growth progression in the second half, as the impact of new customer wins and growth in Packets, together with additional volumes from existing customers, more than offset the ongoing overall decline in the UK transactional mail market.
“In Parcels, the continued progress of our Retail Logistics service should provide further growth opportunities in the second half and there are some signs that the general pricing environment is improving.
“As always, market conditions for the balance of the year remain hard to predict and the final three months of the calendar year represent the key trading period for our business.
“Overall the Group is in a good position, being well financed, with a strong presence in all our chosen markets, with increasing efficiency being achieved in our network, and new products and services starting to gain traction.”

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