Royal Mail rival UK Mail boosts profits

by Noelle McElhatton, marketingdirectmag.co.uk 19-Nov-09, 12:39

LONDON - UK Mail, the UK's second largest mail delivery firm, has boosted its interim profits thanks to an increase in parcels business.

This was against a backdrop of falling revenues however. Revenue at UK Mail's parcel delivery service fell by 11 per cent from £89.6m to £80m because of the economic downturn.

Pre-tax profit rose from £5.9m to £7m for the six months to September 30, as revenues slipped from £194.5m to £188m.

The firm, formerly known as Business Post, handles 17m items of mail a day. The firm said the recession had hit direct marketing mail, which accounts for 30 per cent of UK Mail's letters business.

Guy Buswell, UK Mail chief executive, said recent postal strikes had not meant a boost in the volume of letters it handled, as the firm relies on Royal Mail for final mile delivery.

"We saw little change in volumes and there wasn't that much disruption," Buswell told the Financial Times, adding that use of Royal Mail for final mile delivery of mail remained the most rational way for the company to compete in the market.

UK Mail accounts for 7 per cent of the UK parcels market.