UKM.L Regulatory News (UKM)

5 Oct 2006 07:00

Business Post Group PLC05 October 2006 5 October 2006 Business Post Group plc Pre-close trading update Business Post Group plc, the leading parcel and mail delivery group, providesthe following pre-close update for the six months to 30 September 2006. Trading in the first half of the current financial year has been satisfactorywith Group revenue up 15% to £153m. Progress continues to be made with theperformance improvement initiatives previously announced. Revenues in Parcel Services, (comprising the Group's overnightbusiness-to-business, business-to-consumer, and cross-border parcel deliveryactivities) were down 3.4% to £94m. We continue to make progress with ourinitiatives to strengthen this business, with a focus on further improving ourcustomer service and improving our operational efficiency. Parcels volumes arenow showing growth and our customer service levels we believe remain amongst thehighest in our industry. We have made further progress in improving the performance of the franchisenetwork. Eight franchises have been brought back into corporate ownership in theperiod, bringing the total transferred since the beginning of the calendar yearto 14. Overall these operations make a significant trading loss. Our plan is toreduce the run-rate of these losses such that they are eliminated by the startof the new financial year. However, as previously advised, these losses willimpact our operating profit by some £3m for the current financial year, weightedtoward the first half. In addition we have incurred some £1m of costs on thetransfer of franchisees to corporate ownership. These costs will be includedwithin the operating profit. During the year ended 31 March 2006 a provision was made against outstandingfranchise debt. Recoverability of the amounts due from franchises has been lessthan anticipated resulting in the need to provide a further £1.5m against thefranchise debt. This amount will be provided in the half year as an exceptionalitem. Separately, we have identified a number of specific one-off chargesamounting to some £1.5m, relating to prior years. This amount will be adjustedfor in the interim results. UK Mail, the leading competitor to Royal Mail in mail delivery services,continues to deliver very strong growth, with revenue up 156% to £37m. We havewon a number of significant new contracts, particularly in the financialservices industry. Our flexible business model, leading product innovation andstrong customer focus have been major factors in this success. Since inceptionof our mail business in May 2004 we have processed over one billion mail itemsand in September alone handled some 85 million mail items. Overall revenues in Specialist Services, (comprising the Group's nationwidepalletised goods delivery service and same-day courier activities) were up 3.5%to £21m. In both businesses we are taking action to establish a strongerplatform for sustained growth. We have strengthened the management teams andinvested in their operational infrastructure. The Board continues to expect progress in the underlying results in the currentyear, albeit weighted to the second half as previously advised. Business Post will announce interim results for the six months ending 30September 2006 on 14 November 2006. There will be a conference call for investors and analysts at 8.15am today, 5October 2006. For dial in details please call Hogarth Partnership (contactdetails below). - Ends - For further information, please contact: Business Post Group plcGuy Buswell (Group Chief Executive) 0121 335 1111Steven Glew (Group Finance Director) 01753 706 070 Hogarth PartnershipJohn Olsen 020 7357 9477Fiona NobletSarah Richardson This information is provided by RNS The company news service from the London Stock Exchange