Parcel restructure?
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THE EiUNZL paper group seems set to buy United Parcels following a bid launched this week, and has firmly declared an intention to buy a number of smalland medium-sized carriers.
Its £95 million offer has been accepted by UP's board. James White, managing director of Bunzl and, since June, non-executive chairman of UP, says he expects the bid to go through shortly after the offer documents are put out later this month.
"The parcels market is at a very interesting stage, with few companies consistently making profits. Smalland medium-sized companies come and go continuously."
Bunzl would -help to reshape the industry", said White.
UP has shown reduced profits in the past two years, but has been one of Britain's most consistently profitable carriers for 20 years, said White.
It has developed sophisticated computer systems without which a company of United's size can rapidly run into serious trouble. Bunzl has expertise much akin to United's in its fine paper and disposables operations in Britain and the United States. Distribution accounts for 50 per cent of Bunzl's profits, he said.
Bunzl used to he almost en tirely tied to the tobacco industry, making filters, but has been disengaging from that market for five years. Last year Bunzl's turnover was 4:857 million, on which it made a pre-tax profit of £27.6 million.
Poor trading by Atlas Express, the parcels delivery company rescued from bankruptcy last year by United Parcels, held back its new parent company's profits in the first half of the year.
Figures for the six months to July 27 show that United's pre-tax profit fell from £3.53 million in the first half of 1984 to 0.25 million on turnover up from .01.13 million to £44.12 million.