ENP Newswire -
Release date- 23052014 -
'On the letters side, the headwind is direct delivery and we have strategies in place to counter its adverse financial impact. However, without timely regulatory action, direct delivery could undermine the economics of the Title: Universal Service Description: Postal products and associated minimum service standards that must be available to all addresses in the
'Our key value drivers of single digit revenue growth, margin expansion and underlying free cash flow growth remain the objectives for the Group for the 2014-15 financial year.'
Revenue and volume
Group revenue increased by two per cent, due to parcel revenue growth in both UKPIL and GLS. Parcels are the largest contributor to Group revenue, accounting for 51 per cent.
UKPIL revenue was
UKPIL letter revenue (including marketing mail) declined to
GLS revenue was
Group operating profit before transformation costs grew to
Transformation costs of
Group operating profit after transformation costs increased to
UKPIL generated operating profit after transformation costs of
GLS operating profit was
Notional earnings per share (EPS)
Notional EPS excluding specific items was
Cash flow and balance sheet
EBITDA before transformation costs grew to
Net cash investment of
Free cash flow increased to
As previously indicated, the Board has recommended a final dividend of
Transformation and cost control
Collections, processing and delivery productivity improved by 1.7 per cent, as we reduced the number of frontline hours at a faster rate than the reduction in the level of workload.
Eight Mail Centres closed this financial year, taking the total number of Mail Centres remaining to 40. We have completed or commenced modernisation in 94 per cent of our Delivery Offices.
Tight cost control meant non-people costs in UKPIL reduced by three per cent.
The Ofcom investigation into changes to access pricing puts this commercial response to changing market conditions on hold.
Based on our estimates of the impact of TNT Post
With our proposed access price changes suspended and unfettered direct delivery rollout, there is a reasonable prospect that Ofcom's indicative EBIT margin range of between five and ten per cent for
We are preparing a regulatory submission calling on Ofcom to take action now and carry out a full review of direct delivery.
We are facing increasing challenges in the parcels and letters markets in the
The Board's intention remains to pursue a progressive dividend policy, having regard to the normalised earnings progression of the Group.
Tel: 020 7449 8297
Tel: 020 7449 8105
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