UK Mail Group PLC Agreement with Department for Transport (8636U)
06 December 2013 - 6:01PM
UK Regulatory
TIDMUKM
RNS Number : 8636U
UK Mail Group PLC
06 December 2013
6 December 2013
UK Mail Group Plc
Agreement with Department for Transport - relocation of central
hub
UK Mail Group plc ("UK Mail") is pleased to confirm that
agreement has been reached with the Department for Transport for
the relocation of our central hub.
As indicated in our interim results announcement on 20(th)
November 2013, our central hub in Birmingham is on the route of HS2
(the UK Government's planned high-speed rail route between London
and the Midlands and Northern England) and therefore needs to be
relocated.
An agreement has now been reached with the Department for
Transport that they will support the relocation of the hub to a new
200,000 sq. ft. facility, in the Coventry area, subject to planning
approval.
Construction is scheduled to commence in early 2014 and the move
will take place over a period commencing in Spring 2015. This
timescale supports our plans to introduce significantly increased
automation of our operations from Spring 2015 onwards, with new
automated sortation equipment being installed at the new hub.
The cost of replacing our existing facility and associated
relocation costs will be funded by HS2 Ltd. UK Mail will fund the
costs of deemed upgrades to our existing facility, expected to be
some GBP10m; this is in addition to the previously announced
investment of approximately GBP20m in the new automated sortation
equipment. Of this combined investment, GBP10m is expected to fall
into the current financial year and GBP20m into the year to 31
March 2015. The investment will be funded from UK Mail's existing
cash resources and new bank facilities. We continue to expect a
double digit net return on the investment in automation, with the
full run-rate of benefits expected from September 2015.
Guy Buswell, CEO of UK Mail, said:
"This move will represent an important component of our plans to
develop UK Mail into one of the leading and most advanced parcel
carriers in the UK, with a new state-of-the-art, highly automated
hub at the heart of our network."
Beth West, HS2 Ltd Commercial Director, said:
"We are pleased to have reached this agreement with UK Mail.
This is a significant step forward and provides clear evidence that
HS2 Ltd can work successfully with businesses to secure long term
benefits for both."
For further information, please contact:
UK Mail Group plc
Guy Buswell, Chief Executive 0121 335 1111
Steven Glew, Group Finance Director 01753 706 070
MHP Communications
John Olsen / Giles Robinson 020 3128 8100
HS2 Ltd
Ben Ruse 07717 151 070
Notes to Editors:
The UK Mail Group (formerly known as Business Post Group) is the
largest independent parcels, mail and logistics services company
within the UK, offering innovative delivery solutions both locally
and worldwide. The Group has a national network of 50 sites and
2500 vehicles enabling it to offer business customers a unique
integrated service with a full range of time-sensitive and secure
delivery options for parcels, letters and pallets.
Financial information in this announcement is primarily sourced
from UK Mail's unaudited management accounts. Statements made in
this announcement that look forward in time or that express UK
Mail's management's beliefs, expectations or estimates regarding
future occurrences are "forward-looking statements" within the
meaning of the United States federal securities laws. These
forward-looking statements reflect management's current
expectations concerning future events and actual results may differ
materially from current expectations or historical results.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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