UKM.L Regulatory News (UKM)

12 January 2012

UK Mail Group plc

INTERIM MANAGEMENT STATEMENT

UK Mail Group plc (the "Group") today issues the following Interim Management Statement covering the period 1 October 2011 to 31 December 2011.

Overall performance for the third quarter was in line with our expectations. Reported Group revenues for the quarter showed an increase of some 6% compared to the same period in the previous year. Adjusting for the increase in Royal Mail prices implemented on 6 May 2011, underlying Group revenues increased by some 1%.

Our Parcels business grew its volumes by some 10% compared to the same period last year, driven by an increase in internet shopping related home deliveries, although this change in mix towards B2C restricted the level of revenue growth. Our operations were well managed throughout the peak Christmas period allowing us to maintain our full delivery service, something we believe a number of our major competitors did not consistently achieve. The pricing environment remains challenging, and we expect a continuation of the volume mix seen in the first half of the year.

Our Mail business grew its revenues on a reported basis. On an underlying basis Mail revenues were down some 4% on the same period in the previous year. This reflects the decline in access mail market volumes in the period. We continue to have a good pipeline of customer opportunities.

Our Courier and Pallets businesses both reported good revenue growth.

The Group remains in a sound financial position.

We remain cautious about the evolving market environment and continue to assume that UK economic conditions will remain tough throughout 2012. Our strategy remains to continue to build competitive advantage, developing and investing in our low cost integrated network and bringing to market new products and services to drive profitable revenue growth.

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Notes to editors:

About UK Mail Group plc

UK Mail Group plc is the leading independent parcels, mail and logistics services companies within the UK and one of the main alternatives to Royal Mail for business mail requirements.

Forward-looking statements

This announcement contains certain forward looking statements with respect to the financial condition, results of operations and businesses of UK Mail Group plc. These statements involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. Nothing in this announcement should be construed as a profit forecast.

The information in this announcement is based on unaudited management accounts.