TIDMUKM
RNS Number : 2716F
UK Mail Group PLC
22 May 2013
22 May 2013
UK MAIL GROUP plc
FINAL RESULTS
For the year ended 31 March 2013
A year of good progress with strong momentum in the second
half
Highlights
-- Group revenues up 10.8% to GBP475.4m (2012: GBP429.0m)
o Mail revenues up 16.1% to GBP241.6m (2012: GBP208.1m)
o Parcels revenues up 10.0% to GBP189.3m (2012: GBP172.1m)
-- Group profit before tax (before exceptional items) up 17.7% to GBP17.8m (2012: GBP15.1m)
-- Group profit before tax (reported) up 37% to GBP17.8m (2012: GBP12.9m)
-- Strong balance sheet, net cash at year end of GBP27.0m (2012: GBP18.4m)
-- Final dividend increased 5.1% to 12.4p per share (2012:
11.8p), giving a total dividend increase for the year of 3.3% to
18.8p (2012: 18.2p)
-- Strong levels of customer retention and new client wins
-- Continued to build our share in an evolving market
-- New services, including imail and ipostparcels, making good progress
-- Major plans for increased automation announced today
Guy Buswell, Chief Executive Officer of UK Mail, said:-
"I am pleased to report a very strong performance in the second
half, which has led to a particularly good result for the year.
Trading in the initial weeks of the current year has seen this
positive trend continue, with further good growth in parcels
volumes.
Our industry is undergoing some fundamental changes, from the
rise in e-commerce and e-communication to the expected forthcoming
privatisation of Royal Mail, a valued business partner of UK Mail.
Today's results demonstrate that our business model has the
inherent strength to adapt to this changing market and grasp the
opportunities that exist.
We continue to invest in our business, maintaining our focus on
innovation, efficiency and high service levels. Alongside this, we
have today announced major plans for significantly increased
automation across our network. These plans will be a key factor in
driving further volume growth and margin enhancement for the Group.
We thus remain confident we will continue to make good progress in
the current year and beyond."
For further information, please contact:
UK Mail Group plc
Guy Buswell, Chief Executive Officer 0121 335 1111
Steven Glew, Group Finance Director 01753 706 070
MHP Communications
John Olsen
Ian Payne
Giles Robinson 020 3128 8100
Introduction
We are pleased with the performance we have delivered for the
year, with an encouraging first half followed by a strong second
half. The key factor in this success has been our Parcels business
which had particularly high volumes in the second half leading to
an increase in market share and a good operating margin.
Across our businesses we continue to benefit from our strong
market positions, high service levels and efficient integrated
network. In March we experienced the highest ever daily volumes
across our combined parcels and mail businesses and, given our
focus on our network management, we continued to maintain our
strong customer service levels.
Reported Group revenues for the year at GBP475.4m were up 10.8%
compared to the previous year. Adjusting for the increase in Royal
Mail prices implemented on 2 April 2012 and two less working days
than in the previous year, underlying Group revenues increased by
8.3%. Group profit before tax before exceptional items increased by
17.7% on the previous year to GBP17.8m.
Our Mail business (51% of Group revenues) grew its revenues on a
reported basis by 16.1%; on an underlying basis, revenues were up
by 10.2% compared with the previous year. This good revenue growth
was driven by a continuation of strong customer retention and new
business wins. Mail operating profit increased by 7.8% to GBP10.7m
(2012: GBP10.0m). Our Mail business remains well positioned in its
market with a healthy pipeline of new business opportunities. We
again saw strong progress from imail and related new product
innovations.
Our Parcels business (40% of Group revenues) grew its revenues
by 10% compared to the previous year reflecting the benefit of
recent customer wins. The pricing environment remained challenging
and the shift in mix towards B2C continued. Despite this mix effect
the Parcels operating margin improved to 8.6% for the year (2012:
6.8%). This increase in margin combined with the good revenue
growth has led to a strong increase in the Parcels operating profit
of 40.6% to GBP16.3m (2012: GBP11.6m). We continue to focus on
operational efficiency and innovation to help drive further Parcels
margin improvement. A key factor here is our plans to implement
further automation which is covered in more detail later in this
statement.
In our Courier business (3% of group revenues) revenues have
declined, as expected, by 19.6% compared to the prior year. Strong
operational management however reduced operating costs, helping to
restrict the operating profit decline to 6.7%.
In our Pallets business (6% of group revenues) revenues showed a
slight decline of 0.7% compared to the same period last year.
Pallets operating profits have declined by 63.8% compared to the
same period last year, due primarily to temporary gaps in our
nationwide member network which resulted in additional temporary
operating costs. During the period we have strengthened our Pallets
management team and our network issues are now resolved.
The Board has proposed that the final dividend be increased by
0.6p to 12.4p (2012: 11.8p). The total dividend for the year will
increase to 18.8p (2012: 18.2p) which is covered 1.31 times by
earnings per share.
Our cash generation and financial position remain strong with
net cash balances at the period end of GBP27.0m (2012:
GBP18.4m).
strategy
Our aim is to continue to strengthen our position as the UK's
leading independent integrated postal group. There are two key
elements to this strategy:
First, we continue to enhance the market-leading, low-cost,
integrated network that underpins the competitiveness of our
businesses. We are doing this by continuing to drive down the cost
base of our business and reshaping and extending our depot network
to maximise its efficiency and capacity. We have continued to
invest in our IT infrastructure so as to increase efficiency and
introduce new information and data services to the end customer and
will continue to consider future investment opportunities, such as
further automation of our network, assuming suitable financial
returns can be achieved.
Second, we are focused on continuing to expand the size of the
markets available to us and on increasing our share of those
markets. To do so, we have introduced new and innovative products
and services in both our Parcels and our Mail businesses, a
strategy which is gaining valuable traction.
We have been working hard in recent years, through driving
efficiencies and introducing major product and service innovations,
to position ourselves as competitively as possible to outperform
our competitors and to increase our market share.
Automation
A key element that will increase our capacity and drive down
costs is the further automation of our network. In 2010 we
successfully partially automated our Birmingham hub. This was
undertaken at a cost of some GBP2m and has yielded a net benefit of
some GBP1m per annum, largely through increased vehicle
utilisation. Following this investment we now handle some 20% of
our Parcels volumes through our current automated sortation
facilities.
We intend to increase the level of automated sortation to some
80% of our Parcels volumes, the maximum we believe our business can
achieve at this stage, due to the freight we handle not all being
compatible with automated sortation. This will involve the
installation of further automated sortation equipment, at a capital
cost of approximately GBP20m which we expect will be incurred over
the next two financial years. This will be funded from our existing
cash resources and new bank facilities. We are targeting a double
digit net return on the investment we make, achieving some net
benefits in the year to March 2015, and the full run rate of
benefits achieved from September 2015.
We estimate that this increased automation of our parcels
operations will increase our central sortation capacity by some
45%.
New Hub/HS2
Alongside our plans for automation, we have also been in
discussions with the Department for Transport regarding their plans
for the new HS2 rail link, which will involve the relocation of our
Birmingham hub.
Discussions are proceeding well, and further announcements will
be made shortly once agreement has been reached with the Secretary
of State for Transport.
Results
The results can be summarised as follows:
Year to 31(st) March
2013 2012 Inc/(Dec)
GBPm GBPm %
Group revenue 475.4 429.0 10.8%
====== ====== ==========
Operating profit (before exceptional
items) 17.7 15.1 16.7%
Net finance income 0.1 - 100.0%
------ ------ ----------
Profit before taxation (before
exceptional items) 17.8 15.1 17.7%
Exceptional items - (2.2) 100.0%
------ ------ ----------
Profit before tax (after exceptional
items) 17.8 12.9 37.0%
Taxation (4.3) (3.5) (24.0)%
------ ------ ----------
Profit after taxation 13.5 9.4 41.9%
====== ====== ==========
Basic earnings per share 24.7p 17.3p
Underlying basic earnings per
share 24.6p 20.1p
Revenue and operating profit are analysed as follows:
Revenue Operating Profit
Inc/ Inc/
2013 2012 (Dec) (Dec)
2013 2012
GBPm GBPm % GBPm GBPm %
Mail 241.6 208.1 16.1% 10.7 10.0 7.8%
Parcels 189.3 172.1 10.0% 16.3 11.6 40.6%
Courier 16.5 20.5 (19.6)% 2.6 2.7 (6.7)%
Pallets 28.0 28.3 (0.7)% 0.8 2.1 (63.8)%
------- ------- ------------ ------- ------- ----------
Total 475.4 429.0 10.8% 30.4 26.4 15.0%
======= ======= ============
Central costs (12.7) (11.3) (12.0)%
------- ------- ----------
Operating profit before exceptional items 17.7 15.1 16.7%
======= ======= ==========
Mail
Mail showed further growth in revenues of 16.1% to GBP241.6m
(2012: GBP208.1m). The Mail revenue growth includes the impact of
the Royal Mail price increase on 2 April 2012, which increased
prices by some 11% on an annualised basis. On an underlying basis,
revenues increased by 10.2%.
The further Royal Mail price increase on 2 April 2013 was 3.3%
(2012: 12%), which will not have such a distorting effect on
underlying revenue growth so we will cease to adjust for this
factor in future.
Our mail volumes increased by some 2% compared to the prior
year, while the overall UK mail market has seen a decline in
transactional volumes of some 5% per annum in recent years. This
growth in market share has been achieved through generating
additional mail volumes from existing customers, largely due to
switching from Royal Mail as their prices increase, and a number of
new customer wins.
Mail operating profits were up 7.8% to GBP10.7m (2012:
GBP10.0m). The operating margin reduced to 4.4% (2012: 4.8%), which
is largely the "pass-through" effect of the 11% price increase
imposed by Royal Mail. If the effect of the 11% price increase
imposed by Royal Mail is excluded, the underlying mail margin is
broadly stable compared to the prior year.
To increase the efficiency of our operations and to provide
additional facilities to our customers we are investing in two new,
state of the art, mail sortation machines. This will involve an
investment of some GBP1m. This investment reflects our confidence
in our mail business and its ability to develop with the
market.
UK Mail remains a market leader with an operational template
that is ideally suited to adapt to the demands of an evolving mail
market, and we have continued to focus on growing our business, by
gaining additional volumes from new and existing customers and
driving our new product innovations.
An important factor in the volume growth is product innovation.
imail, our web-to-print postal service, continues to grow strongly.
We have invested to increase our capacity and to provide additional
services, such as high speed insertion. We are developing this
product further to support its market leadership, including the
addition of data services. imail's average daily volumes were more
than 60% higher than those of a year ago. We have a strong pipeline
of new opportunities for this product as we identify new areas
where it can be applied successfully.
On 10 October 2012 Royal Mail published a discussion document on
the development of access contracts, with the aim that the new
agreements would be in place by April 2013. Overall, we believed
that the document covered issues that have long needed to be
addressed and, to that extent, we welcomed it as a step towards a
position of greater clarity for all market participants.
The key terms of the new contract relate to minimum volumes,
contract variation and the ability for Royal Mail to impose future
price increases on operators who do not provide all their mail to
Royal Mail. We do not anticipate any material adverse impact on our
business from these changes.
We have therefore signed the new contract which has resulted in
an access price increase for our customers of 3.3%, compared to the
increase of some 5% that would have been imposed had we not signed
the contract. We believe that all other access operators and most
mail customers with direct access arrangements have also signed the
new contract.
The sale of Royal Mail is widely expected to be announced later
in the year. The Royal Mail accounts for the year to March 2012
showed that it had made a profit of GBP80m from access and, in its
2013 results announcement yesterday, reconfirmed that access made a
considerable contribution to the cost of funding the Universal
Service network. We therefore fully expect a privatised Royal Mail
to seek to continue to benefit from access mail arrangements, and
we continue to see them as an important business partner for UK
Mail.
Parcels
Revenues in Parcels, which comprises the Group's
business-to-business, business-to-consumer and international parcel
delivery service, were up 10% for the year to GBP189.3m (2012:
GBP172.1m).
The Parcels market of some GBP6bn in the UK has two main
components. Growth in the B2B market ("B2B"), which represents some
52% of the market, tends to be linked to overall economic
performance. Growth in the B2C market ("B2C"), which represents
some 48% of the market, is linked to the growth of internet based
home delivery, we estimate that this segment of the market is
growing by some 10% per annum.
We have achieved good volume growth in both the B2B and B2C
market segments with Parcels volumes increasing by some 17%
compared to the prior year. We are particularly pleased with the
volume growth we have achieved in the second half year of some 21%,
following growth in the first half of some 12%, reflecting further
gains in market share. This performance is driven by good customer
retention based on competitive pricing and strong service levels.
We have also benefitted from a number of good customer wins,
although we continued to see an on-going volume mix change towards
the lower margin B2C segment.
The strong volume growth allows us to spread our fixed costs
across the increased volumes and improve our operating margins. As
a result, despite the continued competitive pricing environment, we
have improved our Parcels operating margin to 8.6% for the year
(2012: 6.8%).
The good growth in revenue combined with the operating margin
increase has led to strong growth in the Parcels operating profit
of 40.6% to GBP16.3m (2012: GBP11.6m).
To allow us to handle the increasing volumes we are experiencing
we are taking action to increase our capacity. Of the fifty sites
we operate four will be expanded during the coming year, either
through moving to a nearby larger site or increasing the size of
the existing building.
We have introduced a number of major improvements to our I.T.
infrastructure. These include the provision of industry-leading
functionality both to our customers, and to the recipients of the
parcels they despatch via our services. All customers can now be
notified in advance of expected delivery times and given
easy-to-use facilities if they need to re-arrange deliveries.
We have also completely replaced our delivery driver scanners.
This has involved the purchase of some 2,000 scanners at a cost of
some GBP1.2m. The new scanners provide significantly increased
functionality including improved methods of real-time communication
with our drivers to amend collection and delivery arrangements. The
new scanners also include GPS facilities which will be the basis
for improved route planning and customer delivery notification
which we plan to introduce in the autumn.
Another key development has been the implementation of CRM
technology into our customer care centres which allow us to improve
customer service as well as track queries to ensure they are
resolved promptly.
Our Retail Logistics product, which provides services tailored
to the specific needs of retailers, such as hanging garments,
continues to make good progress. This service is targeted at the
extensive list of retail customers we have access to through our
mail, parcels and courier businesses, and we now have a number of
major retailers trading with us. We estimate the Retail Logistics
market to be worth GBP1.2bn overall, supporting our view that this
represents a significant growth opportunity for the business. We
are in the process of implementing a dedicated Retail Logistics
facility, including automated sortation capabilities for hanging
garments, which will provide increased capacity for this business.
This facility, combined with further developments of our I.T.
platform, will enhance our capabilities and support our development
plans for this key product.
Our ipostparcels product allows any customer, be they an
individual or a small business, to arrange parcel collection and
delivery directly with UK Mail through an easy-to-use website. This
product has been successfully established in the market and is
achieving rapid growth. We are now handling some 10,000 items per
week with this service. There is an increasing trend for parcel
collection and delivery services to be purchased by consumers
on-line, partly caused by the growth of on-line transaction sites
such as ebay and Amazon market place. We will continue to develop
and market this product which we see as a good source of future
profitability.
The overall parcels market in the UK is challenging and highly
competitive. Our target position in this market is to be a high
quality operator which provides the value added services that
customers want. The key here is a reliable next day service,
providing customers with estimated delivery windows, which can
easily be re-arranged, with the use of I.T. to provide added
information. We continue to be successful in winning new Parcels
customers as a result of our high service levels, low-cost network
and strong brand in the market. Our service levels remained very
high even during the peak seasons of the year, when we achieved our
highest ever service levels whilst handling record parcel
volumes.
Courier
Revenues in our Courier business, which provides same-day
delivery services, decreased as expected by 19.6% to GBP16.5m
(2012: GBP20.5m). The revenue decline is largely due to the loss of
a major customer in early 2012. We are continuing to focus on
national contracts that can leverage our network and blue chip
customer base. Operating margins increased to 15.5% (2012: 13.4%)
helping to restrict the decline in operating profit to GBP0.1m
resulting in GBP2.6m for the year (2012: GBP2.7m). The increase in
operating margin reflects the actions management have taken to
improve effectiveness and reduce overheads in the business.
We have now developed a highly efficient nationwide courier
network with a proven ability to support national contracts, which
adds to our ability to offer a fully integrated proposition and
supports product development across the Group.
Pallets
Revenues in our Pallets business, which provides a nationwide
palletised goods delivery service, decreased by 0.7% to GBP28.0m
(2012: GBP28.3m).
The Pallets business is based on a national network of members.
During the period we experienced temporary gaps in this network
which gave rise to additional delivery costs. As a result,
operating profit for the period declined by GBP1.3m to GBP0.8m
(2012: GBP2.1m). These network issues are now resolved and we have
developed successful relationships with major hauliers which will
play a major role in developing this business in the future.
As part of our plans to re-energise this business we have
appointed a new Managing Director and new management team to
support him.
We remain convinced that this business can be successful in a
market with good long term growth prospects.
Finance costs
We have benefited from the good cash balances we have maintained
in the period. As a result we generated interest income of GBP0.1m
(2012: nil).
Financial Position
The Group has strengthened its financial position further during
the year. There has been a good increase in cash balances resulting
in net cash at the end of the period of GBP27.0m (2012:
GBP18.4m).
Net cash inflow from operating activities totalled GBP27.0m
(2012: GBP17.3m). Net cash inflow for the period was GBP6.6m (2012:
outflow GBP0.8m) which included GBP5.5m of cash generated from
working capital (2012: GBP0.2m).
We also repaid all our outstanding debt in the period. We have
GBP1.2m of finance leases outstanding which will be largely repaid
in the new financial year.
The Group paid GBP9.9m (2012: GBP9.9m) of dividends during the
period.
Capital Expenditure
Capital expenditure for the period, including assets acquired
under finance leases, was GBP9.2m (2012: GBP6.5m). The capital
expenditure for the period includes GBP4.6m on IT, as we continue
to develop our systems infrastructure, and GBP3.9m on our
network.
Earnings per share
Basic earnings per share increased 43.0% to 24.7p (2012: 17.3p).
The underlying basic earnings per share, excluding the impact of
exceptional items last year, increased 22.9% to 24.7p (2012:
20.1p).
Dividend
The Board has proposed an increase of 0.6p to take the Final
Dividend to 12.4p (2012: 11.8p), resulting in a total dividend for
the year of 18.8p (2012: 18.2p). The Final Dividend is payable on
26 July 2013, to shareholders registered on 28 June 2013.
The total dividend is covered 1.31 times by earnings (2012: 0.95
times). The Board intends to grow dividends progressively over time
to reflect our targeted earnings growth, whilst also improving the
level of dividend cover.
CURRENT TRADING & OUTLOOK
Trading in the initial weeks of the year has continued the
recent trend, with further good growth in parcels volumes.
We still assume that the UK economic backdrop will remain
challenging in the current year and that the pricing environment
will stay competitive. However, as our industry continues to
evolve, we are confident that we can use our inherent strengths to
adapt to the opportunities and gain further market share.
Whilst maintaining our tight focus on costs, we will at the same
time be continuing to invest confidently in our unique integrated
network. Alongside our pipeline of innovative new products and high
service levels, greater automation is now a key factor in our plans
to drive further volume growth and margin enhancement across the
Group.
We therefore remain confident that we will continue to make good
progress in the current year and beyond.
Guy Buswell
Chief Executive Officer
ADDITIONAL DISCLOSURES
Principal risks and uncertainties facing the business
UK Mail's business and share price may be affected by a number
of risks, not all of which are within our control. The process UK
Mail has in place for identifying, assessing and managing risks is
set out in the Corporate Governance Report on page 21 of the 2012
Annual Report and Accounts. The specific principal risks and
uncertainties that may affect the Group's performance, together
with relevant mitigating factors as identified by the Group's risk
management process were discussed on page 15 of the Group's 2012
Annual Report and Accounts. These included risks relating to IT
systems, business continuity, the impact of the HS2 rail link,
legislation and regulation, competition and fuel factors, in
addition to financial risks including credit risk. It is considered
that these still remain the most likely areas of potential risk and
uncertainty, with the position unchanged from that set out in the
2012 Annual Report and Accounts, save for the removal of potential
risks resulting from the staging of the Olympic games in London on
our operations.
Cautionary statement
This interim announcement contains certain forward-looking
statements, which have been made by the directors in good faith
based on the information available to them up to the time of the
approval of this report and such information should be treated with
caution due to the inherent uncertainties, including both economic
and business risk factors, underlying any such forward-looking
information. Nothing in this report should be construed as a profit
forecast.
Going concern
The directors are satisfied that the Group has sufficient
resources to continue in operation for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in
preparing the condensed consolidated interim financial
statements.
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2013
2013 2012
GBPm GBPm
Revenue 475.4 429.0
Cost of sales (420.7) (380.4)
Gross profit 54.7 48.6
Administrative expenses (37.0) (35.7)
----------------------------------------- -------- --------
Operating profit before exceptional
expenses 17.7 15.1
Exceptional administrative expenses - (2.2)
----------------------------------------- -------- --------
Operating profit 17.7 12.9
Finance income 0.2 0.1
Finance costs (0.1) (0.1)
Profit before taxation 17.8 12.9
----------------------------------------- -------- --------
Taxation before exceptional
items (4.3) (4.1)
Exceptional taxation items - 0.6
----------------------------------------- -------- --------
Total taxation (4.3) (3.5)
Profit for the financial year 13.5 9.4
-------- --------
Total comprehensive income for
the year 13.5 9.4
======== ========
Total comprehensive income attributable
to:
Owners of the parent 13.5 9.4
======== ========
Basic earnings per share 24.7p 17.3p
Diluted earnings per share 24.6p 17.3p
Consolidated Balance Sheet
as at 31 March 2013
2013 2012
GBPm GBPm
ASSETS
Non-current assets
Goodwill 9.5 9.5
Intangible assets 4.9 3.8
Investment properties 1.8 1.8
Property, plant and equipment 33.5 33.4
Deferred tax assets 0.3 0.4
50.0 48.9
------- -------
Current assets
Inventories 0.3 0.2
Trade and other receivables 66.7 63.5
Cash and cash equivalents 28.2 21.6
95.2 85.3
------- -------
LIABILITIES
Current liabilities
Borrowings (0.8) (1.8)
Trade and other payables (74.3) (64.1)
Current tax liabilities (2.3) (1.7)
Provisions (0.3) (1.3)
(77.7) (68.9)
------- -------
Net current assets 17.5 16.4
------- -------
Non-current liabilities
Borrowings (0.4) (1.4)
Deferred tax liabilities (1.7) (2.2)
Provisions (1.0) (0.8)
(3.1) (4.4)
------- -------
Net assets 64.4 60.9
======= =======
Shareholders' equity
Ordinary shares 5.5 5.5
Share premium 15.3 15.3
Retained earnings 43.6 40.1
Total equity 64.4 60.9
======= =======
Cash Flow Statements
for the year ended 31 March 2013
Group
2013 2012
GBPm GBPm
Operating activities
Cash generated from operations 31.1 21.8
Finance income received 0.1 0.1
Finance costs paid (0.1) (0.1)
Taxation paid (4.1) (4.5)
Net cash inflow from operating
activities 27.0 17.3
------- -------
Investing activities
Purchase of property, plant and
equipment (6.2) (4.7)
Purchase of intangible assets (1.6) (1.8)
Net cash outflow from investing
activities (7.8) (6.5)
------- -------
Financing activities
Dividends paid to shareholders (9.9) (9.9)
Repayment of finance lease liabilities (0.8) (0.8)
Net proceeds from issue of ordinary
share capital 0.1 0.1
Repayment of term loan (2.0) (1.0)
Net cash outflow from financing
activities (12.6) (11.6)
------- -------
Net increase/(decrease) in cash
and cash equivalents 6.6 (0.8)
Cash and cash equivalents at
the beginning of the year 21.6 22.4
Cash and cash equivalents at
the end of the year 28.2 21.6
------- -------
Consolidated Statement of Changes in Equity
for the year ended 31 March 2013
2013 2012
GBPm GBPm
Shareholders' equity as at the
beginning of the year 60.9 61.1
Dividends paid to shareholders (9.9) (9.9)
Employees' share options scheme:
Value of employee services (0.1) 0.2
Exercise of share options - 0.1
Profit for the year 13.5 9.4
------ ------
Total equity as at the end of
the year 64.4 60.9
------ ------
1. Segmental information
Year ended 31 March 2013
Mail Parcels Courier Pallets Total
GBPm GBPm GBPm GBPm GBPm
Revenue 241.6 189.3 16.5 28.0 475.4
------ -------- -------- -------- -------
Segmental operating
profit 10.7 16.3 2.6 0.8 30.4
Central costs (12.7)
-------
Operating profit 17.7
Finance income 0.2
Finance costs (0.1)
-------
Profit before
taxation 17.8
Year ended 31 March 2012
Mail Parcels Courier Pallets Total
GBPm GBPm GBPm GBPm GBPm
Revenue 208.1 172.1 20.5 28.3 429.0
------ -------- -------- -------- -------
Segmental operating
profit before
exceptional items 10.0 11.6 2.7 2.1 26.4
Exceptional administrative
items (0.7) (1.2) (0.3) - (2.2)
------ -------- -------- -------- -------
Segmental operating
profit 9.3 10.4 2.4 2.1 24.2
Central costs (11.3)
Operating profit 12.9
Finance income 0.1
Finance costs (0.1)
Profit before
taxation 12.9
2. Exceptional items
2013 2012
GBPm GBPm
Restructuring costs - 2.2
Exceptional taxation credit - relief on restructuring
costs - (0.6)
Exceptional items - 1.6
------ ------
Operations restructure
During the year ended 31 March 2012, the board approved a change
programme, designed to improve the efficiency of the network
infrastructure, and to reduce the fixed cost of the business. This
resulted in a number of restructuring changes in operational, sales
and head office management with further changes surrounding the
regionalisation of customer care centres, the closure of four
depots and the restructuring of Courier operations.
These changes resulted in an exceptional cost of GBP2.2m which
comprised of GBP1.2m redundancies, GBP0.8m property closures, and
GBP0.2m other costs.
Exceptional taxation credit
The exceptional taxation credit of GBP0.6m in the year ended 31
March 2012 related to relief in respect of exceptional
restructuring costs included above.
3. Earnings per share
Basic earnings per share have been calculated by dividing the
profit for the year by the weighted average number of ordinary
shares in issue for the year ended 31 March 2013 of 54,632,719
(2012: 54,586,755). Diluted earnings per share have been calculated
by adjusting the weighted average number of ordinary shares for the
effect of the exercise of share options, increasing the number of
shares to 54,707,761 (2012: 54,597,037).
4. Analysis of net cash
Group
At 31 At 31
At 31 March March March
Cash Cash
2011 Flow Other 2012 Flow Other 2013
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Cash at bank
and in hand 22.4 (0.8) - 21.6 6.6 - 28.2
Total cash 22.4 (0.8) - 21.6 6.6 - 28.2
------------ ------ ------ ------- ------ ------ -------
Debt due within
one year (1.0) 1.0 (1.0) (1.0) 1.0 - -
Debt due after
one year (2.0) - 1.0 (1.0) 1.0 - -
Finance leases (2.0) 0.8 - (1.2) 0.8 (0.8) (1.2)
Total debt (5.0) 1.8 - (3.2) 2.8 (0.8) (1.2)
------------ ------ ------ ------- ------ ------ -------
Net cash 17.4 1.0 - 18.4 9.4 (0.8) 27.0
------------ ------ ------ ------- ------ ------ -------
5. Reconciliation of profit to net cash flow generated from operations
Group
2013 2012
GBPm GBPm
Profit for the year 13.5 9.4
Taxation 4.3 3.5
Finance income receivable (0.2) (0.1)
Finance costs payable 0.1 0.1
Depreciation and amortisation 7.7 8.4
Loss/(profit) on disposal of
property, plant and equipment 0.2 0.2
Share-based payments (0.1) 0.1
(Increase)/decrease in trade
and other receivables (3.2) (6.8)
(Increase)/decrease in inventories (0.1) -
Increase/(decrease) in trade
and other payables 9.6 5.5
(Decrease)/increase in provisions (0.7) 1.5
Net cash flow generated from
operations 31.1 21.8
------ ------
6. General information
(i) Statutory Accounts
The financial information set out above does not constitute the
Group's statutory accounts for the year ended 31 March 2013 within
the meaning of section 435 of the Companies Act 2006. Financial
Statements for the year ended 31 March 2013 will be delivered to
the registrar of companies in due course. PricewaterhouseCoopers
LLP has reported on these financial statements and their report was
(i) unqualified, (ii) did not include a reference to any other
matters to which the auditors drew attention by way of emphasis
without qualifying their report and (iii) did not contain a
statement under section 498(2) or (3) of the Companies Act
2006.
(ii) Accounting policies
The accounting policies applied by the Group in its consolidated
financial statements for the year ended 31 March 2013 are in
accordance with International Financial Reporting Standards and
IFRIC interpretations as adopted by the European Union (Adopted
IFRSs) and the Companies Act 2006 applicable to companies reporting
under IFRS. The accounting policies, which have been applied
consistently to all the years presented, are set out in those
financial statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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