Mail company TNT yesterday admitted that resolving its tax issues could cost it as much as £376.7 million.
Following a long running investigation into the position of unnamed subsidiaries, TNT said its contingent tax liability was between £102.7 million and £376.7 million. Analysts' estimates had ranged from £273.9 million to £547.9 million.
But the firm, whose large UK business is centred on Atherstone in Warwickshire, said it had not received any claims from authorities and had not taken any charges against quarterly earnings.
TNT - whose shares have risen on takeover speculation in recent months - reported fourth-quarter earnings before interest and tax of £220.5 million, excluding any logistics businesses it is selling or has already sold, after £219.1 million the previous year.
TNT booked a loss from discontinued operations of £65.7 million, weighing on fourth-quarter net profit that almost halved to £73.9 million from £143.1 million the previous year.
Chief executive Peter Bakker said the firm viewed the risk of a tax liability materialising below 50 per cent in each individual case, and so did not have to take a provision under new IFRS accounting rules.
A supervisory board investigation had found what it believed were illegal acts relating to past tax matters, but concluded that "the integrity of past and present members of the board of management is not in doubt".
A spokesman said the investigation had found certain falsifications, including the backdating of documents, and this was now being reported to the relevant tax authorities. It was then up to the authorities to decide what action to take. The employees suspected of committing the acts no longer work for TNT, Mr Bakker said.
Analysts said the 2006 out-look for TNT's mail division had disappointed.
The company forecast a slight increase in revenue and an EBIT margin of around 18 per cent for its mail division. The express delivery business is expected to increase revenue by around ten per cent in 2006, including acquisitions, at an operating margin of nine to 9.5 per cent.
T NT reported fourth-quarter revenue of £1.9 billion, excluding those logistics operations that were booked as discontinued. On a comparable basis, revenue rose 3.2 per cent. It announced in December it was quitting the contract logistics business to focus on mail and express delivery.
Its shares have been supported by speculation the firm could be taken over. In January, German private equity investor Cornelius Geber said a consortium planning a bid for TNT was almost ready, but has not said anything since.
The firm is now trading at about 14 times estimated 2006 earnings, compared to 11 for German rival Deutsche Post and 19 and 18 for UPS and FedEx.
Established in the UK in 1978, TNT has an annual turnover of more than £750 million, employs 10,600 people in the UK and Ireland and operates more than 3,500 vehicles.
Meanwhile, National Australia Bank - halfway through a restructuring after a trading scandal and profit warnings in 2004 - yesterday disclosed it had £4.5 billion in errors in its 2005 annual report.
The mistakes were "classification errors" and did not change 2005 earnings or NAB's financial position, said the bank, which is still implementing recommendations from the country's financial watchdog after a 2004 currency trading debacle.
"I'd be very surprised if anyone was sacked," said chief executive John Stewart.