UK Mail Group, one of the key challengers to Royal Mail’s postal operation, saw profits plummet nearly ten per cent for the year ended March 31, despite a rise in turnover.
The company has blamed the double whammy of tough economic conditions and atrocious weather at the tail end of last year for its woes, and the results are in sharp contrast to its six month report which saw profits up by 4.8 per cent. While revenues were up 2.8 per cent overall to £395.8m, profit was down 9.9 per cent to £16.1m for the year.
UK Mail said revenues in its mail business were up 4.8 per cent to £181.9m with good progress in bringing in new customers and increased custom through product innovations. Mail profits were down 3 per cent year-on-year, however, with prospects that a major price rise at Royal Mail this month will mean challenges for the coming year.
Parcel revenues were up 1.2 per cent, but in a highly competitive market operating profits were down 19 per cent with margins squeezed.
UK Mail chief executive Guy Buswell said: “After a satisfactory start to the year, the second half was undoubtedly more challenging for the markets in which we operate. Whilst we continued to grow revenues in our core businesses, our margins and therefore profits came under pressure.”
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