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Business
Page 17
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Post drop MAIL OPERATOR Business Post has blamed tough trading at its Express parcels unit for an anticipated 10% drop in pre-tax profits for the year to March 2006.
The UK's fourth-largest mail operator says the forecast — 10% lower than the £20.5m posted for the year to April 2005 — reflects a sharp decline in volume that mirrors the gloomy economic climate.
It adds that market conditions for its B2B Express division, which accounts for half Business Post's revenue, have deteriorated since the start of 2005, although the rate of decline has now slowed.
Business Post chief executive Paul Carvell says the slowdown followed an unparalleled decline in delivery volumes. "This is a cascade effect that has run from one side of the economy to another. At the beginning of the financial year the division was running 8% up on the same period last year. But then we saw trading fall progressively and our bigger customers, many of whom are in the computer sector, were giving us fewer parcels to deliver."
Now it is giving Om of financial support to a network of franchised mail depots. A series of cost-cutting measures since July, including 42 redundancies and cost reductions, are also designed to boost the division's fortunes.
The picture was brighter elsewhere. Revenue at UK Pallets, the group's palletised goods delivery service, was up 16% in the first five months of 2005.