UKM.L Regulatory News (UKM)

9 April 2013

UK Mail Group plc

PRE-CLOSE TRADING UPDATE

Strong performance in fourth quarter

UK Mail Group plc (the "Group") today issues the following pre-close trading update for the financial year ended 31 March 2013.

Overall performance for the fourth quarter is expected to be above our previous expectations, with performance in March particularly strong. Reported Group revenues for the quarter are expected to show an increase of some 6% compared to the same period in the previous year, giving total reported revenue growth for the financial year of some 11%. Adjusting for the increase in Royal Mail prices implemented in April 2012 and two less working days than in the same period last year, underlying Group revenues for the quarter are expected to show an increase of some 6%, giving a total underlying revenue increase for the year of some 8%.

Our Parcels business continued to deliver a strong performance, with volumes for the quarter increasing by some 20% compared to the same period last year. This volume growth was largely driven by an increase in home deliveries related to online shopping, which resulted in a continuation of the mix change towards B2C that we have previously seen.

Our Mail business achieved good revenue growth. This growth continues to be driven by strong customer retention and business wins.

Our Courier business had a decline in revenues, as expected. Revenues in our Pallets business declined. This business has faced a difficult year, however its position is improving and it enters the new financial year with a new management team and the previous network issues now largely resolved.

The Group remains in a sound financial position.

Guy Buswell, Chief Executive of UK Mail, said:

"The performance of our business in the final quarter of the year was again strong, partly helped by the early Easter. I am particularly pleased with the performance of our parcels business where volume growth continues to be high. In March we experienced the highest ever daily volumes across our combined parcels and mail businesses and, given our focus on our network management, we continued to maintain our strong customer service levels.

"We still assume that the UK economic backdrop will remain challenging in 2013 and that the pricing environment will stay competitive. Our industry also continues to evolve, resulting in a number of opportunities and challenges. With our highly competitive business model, tight focus on costs and strong balance sheet, we remain confident that we will continue to make good progress."

UK Mail Group will report its final results for the year ended 31 March 2013 on 22 May 2013.

- Ends -

Notes to editors:

All information in this announcement is sourced from UK Mail's unaudited management accounts. Statements made in this announcement that look forward in time or that express UK Mail's management's beliefs, expectations or estimates regarding future occurrences are "forward-looking statements" within the meaning of the United States federal securities laws. These forward-looking statements reflect management's current expectations concerning future events and actual results may differ materially from current expectations or historical results.