UK Mail blames fewer parcels for lower H1 revenue forecast
Courier firm UK Mail forecast that first-half revenue would be lower than last year due to worse-than-expected second quarter parcel volumes, casting uncertainty over annual results and hitting its shares.
UK Mail, which competes with the likes of Royal Mail and TNT, said it expected reported group revenue to decline by about 1% against the same time a year ago, but underlying revenue would be flat after adjusting for one less working day in the period.
While revenue was good in the first quarter, the second three months of the year had been more challenging with parcel volumes below expectations, particularly in the latter weeks of the period.
"It is too early to assess whether this represents a more persistent trend and therefore the extent of any possible impact on the full year outcome," UK Mail said in a trading statement.
In parcels, average daily volumes for the first half are set to rise some 6% against the same period last year, driven partly by more home deliveries related to online shopping, although parcels volume growth continued to moderate.
Mail business revenues are expected to fall some 6%, due to mix changes, with average daily mail volumes some 2% ahead of the same period last year.
The group said its new automated hub is set to enter service from May 2015.
"Our focus over the period until May 2015 is to manage the transition of our business to the new location and changed working practices whilst maintaining the underlying momentum in our business," the company said.
Shares fell 90p or 15.9% to 475p at 08:11 in London.