UK Mail warns of falling revenues

National business postal operator UK Mail Group has issued a warning that it expects to see a decline in revenue for this financial year.

In a statement issued yesterday (6 April), UK Mail said: “Overall revenue growth has been impacted by a continued mix effect in our Mail business which is expected to result in a revenue decline for the year of some 3%, despite Mail volumes for the year being up some 5% on the previous year.”

The company statement continued: “ Our Parcels business is expected to achieve volume growth for the year of some 4%. Volume growth in the fourth quarter has suffered in comparison to last year due to the spike in volumes in the comparative period as a result of the demise of City Link.

“Service levels in both our Parcels and Mail businesses remain at high levels. Our new automated hub continues to operate well and to achieve good throughput levels. We are making further progress with our plans to improve the efficiency of our network in markets that remain highly competitive.”

UK Mail Group’s recent financial results were hit by the transition to its new national parcel hub in Ryton near Coventry. In November Chief Executive Guy Buswell resigned from his position, a week after his company issued a profits warning. The company will report its final results for the year end 31 March, on the 24 May.

Where UK Mail Group’s chief rival Royal Mail seems to be going from strength to strength, UK Mail and its other postal company rivals seem to be struggling, in part due to fierce competition from the recently privatised postal giant but also in readjusting to the digital e-commerce world.

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