UK Mail delivers confident update

Parcel delivery and logistics services group UK Mail said its performance in the first half was satisfactory as solid trends continued into the second quarter despite a persistently challenging environment.

Reported group revenues for the first half are expected to show an increase of around 13% compared to the same period a year ago. Adjusting for the increase in Royal Mail prices implemented in April and after one less working day than a year ago, underlying group revenues increased by 10%.

Its mail business continued to show good revenue growth following strong customer retention and new customer wins.

"This business remains well positioned in its market with a good pipeline of new business opportunities," the group said in a statement.

Its parcels business also showed good revenue growth, with continued volume growth compared to the prior year after recent customer wins.

However, the courier business saw a decline in revenues as expected while it pallets business achieved revenue growth albeit in challenging operating conditions.

"We expect the economic backdrop to remain challenging into 2013 and the pricing environment to stay competitive. We are continuing to plan accordingly, with tight control of our costs remaining a key focus," the group said in its first half update.

"We have leading and differentiated positions in our markets, a highly competitive business model, and the group remains in a sound financial position, all of which gives us confidence for the future," it added.

CJ