Parcel and mail carrier Business Post (BPG), which has a large distribution operation in Birmingham, has seen a 25 per cent rise in half-year profits after it grabbed a greater slice of the collection market from rival Royal Mail.
The Slough-based company said its mail operation, which picks up and sorts post ahead of delivery by Royal Mail, increased its market share by volume collected to 13 per cent, compared to 11 per cent six months earlier. As a result, operating profits from UK Mail rose 30.2 per cent to £5.6 million and helped group pre-tax profits hit £6 million in the six months to September 30.
The performance by UK Mail offset a five per cent drop in profits at the company’s parcels arm after rising fuel prices put margins under pressure.
It posted an interim dividend of 6.4 per cent - exactly the same as last year.
Companies such as Business Post have been steadily growing as corporate customers snub Royal Mail following the liberalisation of the postal market.
Business Post said it was less exposed to fluctuations in levels of economic activity as some 70 per cent of its mail volume was based on delivering regular statements or statutory notifications.
Chief executive Guy Buswell said: “The group has made satisfactory progress in the first half of the year. UK Mail has achieved good growth in revenues and profit, driven by new business wins and further mail volumes from existing customers. Parcels revenues showed a satisfactory improvement on last year. Revenues and profits in Specialist Services were up significantly on last year, with new contracts driving a strong improvement in our Courier business.”
The company - which won some new business after the collapse of Aldridge-based Amtrak in August - was entering a “more challenging economic period”. However, the firm’s business model, underpinned by a strong balance sheet, remained robust. He said: “We are successfully developing our business streams across a broader base of activities and with a focus on longer-term contracts in areas less directly exposed to levels of economic activity.”