LONDON (Alliance News) - Postal and logistics operator UK Mail Group PLC on Tuesday posted lower pretax profit due to exceptional items booked in its recent financial year, while revenue dipped and the group trimmed its dividend payout.
UK Mail said its pretax profit for the year to the end of March fell to GBP14.4 million from GBP20.1 million, hit by costs related to its new automated hub, which had a troubled start to life.
Stripping out exceptional items, profit fell further, down to GBP10.7 million from GBP21.0 million, but this was offset by a compensation payment from High Speed 2, which caused the hub relocation in the first place and the building of the new automated hub. HS2 is the planned fast train line between London and Birmingham and further north.
UK Mail said it will pay a final dividend of 10.9 pence per share, down from 14.5p a year earlier and meaning its total payout falls to 16.4p from 21.8p.
UK Mail revenue fell 0.8% year-on-year to GBP481.0 million from GBP485.1 million, again hit by the growing pains experienced by the automated hub. Parcels revenue grew 1.4% over the year, but mail revenue fell 3.1%, in line with a secular decline in the business amid the ongoing transition over to electronic communications.
"Last year was a challenging one but we have made good progress in implementing a detailed plan to address the issues we faced in transitioning to our new automated hub. The hub is now operating very well and achieving good throughput levels, having recently processed its 30 millionth parcel, with consistently high service levels in both Parcels and Mail in recent months," said Chairman Peter Kane.
Kane expects the benefits from the investments the group has made to flow through in the second half of the current financial year, meaning the current year will be more weighted to the second half than is normal for the group.
The group added the process of appointing a successor to its former chief executive, Guy Buswell, who stepped down in November 2015, continues. Kane is executive chairman until an appointment is made.
UK Mail shares were up 4.8% to 299.25p Tuesday.
By Sam Unsted; email@example.com; @SamUAtAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.