UK Mail's (UKM) chief executive, Guy Buswell, reckons that customers looking for cheaper mailing options - after Royal Mail's prices soared in April - has been good for business. Indeed, even though mail volumes have continued to decline in the wider market, UK Mail's volumes were up 2 per cent at the half-year stage. Accordingly, mail revenues jumped 23.6 per cent year on year to £115.9m, with operating profit here having risen 12.9 per cent to £5.7m.
Moreover, the growth in online shopping helped drive up the group's parcel volumes by 10 per cent in the period. Parcel revenue grew 4.4 per cent to £87.2m which, combined with cost-cutting measures, helped lift divisional operating profit by 5.5 per cent to £5.8m. The courier business, meanwhile, remains troubled and revenue there slumped 18.4 per cent to £8.3m - although tight cost control kept the unit's operating profit stable at £1.1m. The pallets business saw revenues remain roughly flat at £14.3m.
Broker Investec Securities has upped its estimate for adjusted full-year pre-tax profit from £15m to to £15.5m, with its EPS estimate rising from 20.7p to 21.3p (20.1p for 2012).
UK MAIL (UKM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 281p | MARKET VALUE: | £154m | |
| TOUCH: | 281-288p | 12-MONTH HIGH: | 290p | LOW: 188p |
| DIVIDEND YIELD: | 6.5% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 110p* | NET CASH: | £15.7m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 202 | 6.00 | 8.10 | 6.40 |
| 2012 | 226 | 7.30 | 10.1 | 6.40 |
| % change | +12 | +22 | +25 | - |
Ex-div: 5 Dec Payment: 18 Jan *Includes intangible assets of £14.4m, or 26p a share. | ||||
