Logistics company Exel - currently the subject of a £3.7 billion takeover bid from German mail giant Deutsche Post - was in confident mood yesterday after posting strong third quarter trading figures.
The firm, which employs 10,000 in the Midlands, told shareholders it expected to deliver strong full year growth.
In an update prior to full third-quarter results, Exel said its contract logistics operations have delivered a good performance, with strong underlying organic growth combined with "continued good performances from recent acquisitions" including Tibbett & Britten and Power Packaging.
In addition, the company said its Tradeteam unit had performed "encouragingly" in the period, and net contract wins "increased significantly on the same period in 2004".
The performance of its freight management business in the quarter improved significantly over last year, Exel added, with a 13 per cent rise in seafreight revenues and improved operating margins outweighing a slowing of airfreight volume growth to two per cent. Overall, the division achieved "strong organic profit growth."
Last month, Deutsche Post, the semi-privatised German postal service, offered £3.7 billion for Exel in a bid to become the world's leading logistics company.
The takeover, which would be the biggest-ever acquisition for Deutsche Post, is part of the German group's strategy to reduce its dependence on mail delivery before it loses its domestic monopoly in that business area at the end of 2007.
Deutsche Post said it would pay Exel shareholders 900 pence plus 0.25427 Deutsche Post share for every Exel share held. The proposed tie-up, which was backed by the directors of both companies, will create the world's largest logistics business with a combined workforce of 500,000.
Exel, based in Bracknell, Berkshire, has more than 110,000 staff worldwide and is best known for handling warehouse and distribution operations for a number of blue-chip retailers. It has a major operation at Hams Hall.
Deutsche Post said the deal made sense because it combined Exel's strong position in the UK and US with its own activities in Europe.
Deutsche Post chief executive Dr Klaus Zumwinkel described the proposed deal as a 'major strategic step', while Exel said it presented an opportunity for its shareholders to realise significant value.
Exel chief executive John Allan will lead the integration process and run the enlarged logistics part of the operation from Exel's base at Bracknell.
During the past 15 years, Deutsche Post has transformed its business from a government-managed agency into a multi-national group.
Around 40 per cent of its revenues come from domestic and international courier, parcel and express delivery services, including through DHL.
It expects to generate cost savings of £149.1 million from the tie-up by 2008.