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| Version 1 | Version 2 |
|---|---|
| UK Mail shares tumble after profits warning | UK Mail shares tumble after profits warning |
| (about 3 hours later) | |
| Shares in UK Mail tumbled on Friday after the parcels and logistics company issued a warning on annual profits. | Shares in UK Mail tumbled on Friday after the parcels and logistics company issued a warning on annual profits. |
| The group said additional operating costs associated with its new automated hub in Ryton, near Coventry, meant that annual pretax profit before one-off items would be between £10m and £12m – half the previous year’s figure. | The group said additional operating costs associated with its new automated hub in Ryton, near Coventry, meant that annual pretax profit before one-off items would be between £10m and £12m – half the previous year’s figure. |
| “The near-term challenges and their impact on the current year’s performance are more significant than anticipated,” the company said. | “The near-term challenges and their impact on the current year’s performance are more significant than anticipated,” the company said. |
| Shares fell more than 15% in the first hour of trading and were down almost 10% in afternoon trading at 478.2p. The stock has fallen by almost a quarter in the past 12 months. | |
| UK Mail said parcel volumes for the first four months of the new financial year were 4% higher than in the same period last year. However, the move to the new hub had caused “a greater level of customer churn and loss of volume than anticipated”. | UK Mail said parcel volumes for the first four months of the new financial year were 4% higher than in the same period last year. However, the move to the new hub had caused “a greater level of customer churn and loss of volume than anticipated”. |
| More parcels than expected had proved to be incompatible with the new automated equipment, resulting in higher costs. | More parcels than expected had proved to be incompatible with the new automated equipment, resulting in higher costs. |
| Guy Buswell, chief executive, said: “This near-term setback to our financial performance is clearly very disappointing. However, we are taking decisive action to address these issues and we are confident that they can be reversed.” | Guy Buswell, chief executive, said: “This near-term setback to our financial performance is clearly very disappointing. However, we are taking decisive action to address these issues and we are confident that they can be reversed.” |
| The new hub would make UK Mail one of the most efficient and competitive operators, he said: “We remain confident in our medium- and long-term growth prospects.” | The new hub would make UK Mail one of the most efficient and competitive operators, he said: “We remain confident in our medium- and long-term growth prospects.” |
| The company benefited from the collapse of rival City Link late last year, handling record volumes of mail over Christmas. | The company benefited from the collapse of rival City Link late last year, handling record volumes of mail over Christmas. |
| For the year to 31 March, pre-tax profit before exceptional items fell 4.2% to £21m on revenues 0.8% higher at £485.1m. | For the year to 31 March, pre-tax profit before exceptional items fell 4.2% to £21m on revenues 0.8% higher at £485.1m. |
| Buswell apologised in 2013 after Channel 4 secretly filmed UK Mail staff at one of its sorting depots dropping, throwing and kicking customer parcels. | Buswell apologised in 2013 after Channel 4 secretly filmed UK Mail staff at one of its sorting depots dropping, throwing and kicking customer parcels. |