Mail and parcels firm Business Post today said its financial year had been better than expected, despite weaker revenues in the second half.
The company, which picks up and sorts post ahead of delivery by Royal Mail, said difficult economic conditions hampered its parcels business while growth in mail moderated from the “very high levels” seen previously.
However, Business Post, which operates a major hub Birmingham, said it believed it was gaining share in its markets, with operations also benefiting from high levels of efficiency.
Its drive to reduce fixed costs has resulted in some depot closures and job losses, although a spokesman was not able to provide details.
The company, which has a network of more than 50 sites and 3,500 vehicles, said it expected profits for the year to March 31 to be “somewhat above” market expectations.
Investec Securities raised its forecast for the year just ended to £17.5 million, from £16.8 million, but given the economic backdrop said it would not be changing its 2010 or 2011 forecasts.
Analyst Robert Morton said Business Post was a well-managed business “that will come through the recession well”.
Firms such as Business Post have been steadily growing as corporate customers turn their backs on Royal Mail following the liberalisation of the postal market. Group revenues for the financial year increased seven per cent on the previous year. The company said: “Revenues in the second half year were down slightly on the previous year, primarily reflecting the effects of the difficult economic environment on our parcels business. As expected, mail growth has moderated from the very high levels previously achieved, but the business has continued to win significant new contracts. We believe we are outperforming the markets in which our businesses trade, and are therefore gaining market share.”