One of the two competitors to Royal Mail, UK Mail, recently experienced a surge in the use of direct marketing by advertisers helping it to bolster revenue. UK mail provides competition to Royal Mail for sorting and delivery of letters across Britain.
Guy Buswell, chief executive, remarked that the demand revival for promotional and direct marketing was the primary reason behind such improvements.
From FT.com:
Mr Buswell welcomed the confirmation of a deal between Royal Mail and the unions last month, aimed at avoiding strike disruption and delivering a “culture of co-operation”.
It would allow UK Mail to expand into the “jiffy bag” delivery of smaller packages via Royal Mail’s network, he said.
He added that the company would be rolling out its parcel-handling service with an unnamed, top 10 UK online retailer from next week, while it remained in talks with two other leading internet-based retailers about taking on parcel distribution for them.
UK Mail lifted pre-tax profits from £16m to £17.8m in the year to March 31 as revenue, hit by a stagnating demand in its parcel delivery business, which accounts for about half of turnover, held steady at £385m.
Tough trading in the postal delivery sector was reflected by last month’s rescue of DX Group, which saw private equity group Candover maintain a majority stake following a deal with creditors. Candover bought the UK postal services company in 2007 for £347m.
The total dividend at UK Mail increased by 1p to 18.2p and is the first increase since 2006.
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