UKM.L Regulatory News (UKM)

6 Feb 2007 07:00

Business Post Group PLC06 February 2007 6 February 2007 FEDEX CONTRACT UPDATE / BBC TV LICENSING CONTRACT WIN FedEx Business Post Group plc announces that, further to its statement on 18 December2006 regarding FedEx Corporation's intention to terminate the Group's contractas its Global Service Participant in the UK, the terms of that termination havebeen satisfactorily agreed. The contract will now terminate on 30 April 2007with the people and dedicated assets related to the contract and associatedcosts being transferred to FedEx. This early termination avoids the potentialfor an increasingly unprofitable run-down of the contract over the full term ofthe original notice period. In the year to 31 March 2007 the FedEx contract will generate revenue ofapproximately £19m, and a profit contribution of some £2m. Business Post willincur an exceptional cost in the current financial year of some £1m relating tocontract exit costs. Guy Buswell, Chief Executive of Business Post, said: "We are pleased to have reached an agreement with FedEx. We wanted this earlytermination to allow us to focus our resources immediately on the development ofthe new, longer term opportunities now open to the group," BBC TV Licensing Business Post's mail company, UK Mail, the leading competitor to Royal Mail indownstream access postal services, has been awarded a major new contract withBBC TV Licensing worth up to £8.1 million of revenue per annum. The BBC began trialling UK Mail's services in October. During this periodsubstantial cost savings were identified along with an improved flow of calls toits call centre. TV Licensing sends out approximately 61 million items of mail a year. Allpresorted mail will now be dispatched via UK Mail's downstream access modelwhereby mail is collected and sorted at its national network of 58 sites on adaily basis. The contract with BBC TV Licensing will commence on 1 April 2007. Business Post will provide a close period trading update on Wednesday 4 April2007, ahead of its preliminary results announcement on Wednesday 23 May 2007. - Ends - Enquiries: Business Post Group plcGuy Buswell, Chief Executive 0121 335 1111Steven Glew, Finance Director 01753 706 070 Hogarth PartnershipJohn Olsen 020 7357 9477Fiona NobletIan Payne This information is provided by RNS The company news service from the London Stock Exchange