veries business UK Mail reported resilient profits for the third quarter yesterday, despite struggling with the economic slowdown in the Eurozone.
Its financial results took a hit from a goodwill writedown of £7.3m in its pallets business, but the other units proved relatively healthy.
Group revenues slid 0.8 per cent on the year to £241.4m, while the writedown sent pre-tax profits spiralling down 58.7 per cent to £4.9m.
However, analysts remain optimistic about the group’s prospects.
“Generally, despite weaker trading we believe that UK Mail is well placed to capture more mail and parcel volumes as the UK and European economy recovers, and its new hub will bring benefits to margins,” said Robin Byde at Cantor Fitzgerald.
The hit in the pallets business came from lower profit forecasts, resulting in the firm writing down some goodwill from the acquisition of that unit.
Other units performed more strongly than the pallets unit.
Revenues in the parcels division increased 3.4 per cent to £109.4m, and revenues in the courier unit rose by 5.8 per cent to £8.4m.
However, revenues from UK Mail’s biggest unit, its mail operations, fell 5.1 per cent to £109.7m.
“We are now in a period of significant investment and transition, as we put the infrastructure in place for the next phase of growth,” said chief executive Guy Buswell.
“The new, fully automated hub under construction represents the largest strategic development in our history. Ours is a growth market that is rapidly polarising between high quality, innovative and sophisticated operators and those at the opposite end of the value scale.”
The firm’s shares rose 3.28 per cent on the day.