| Business Post issues profits warning, says revenues could be 10 percent less |
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LONDON - Parcels group Business Post has warned that its profits for this year would be substantially lower and that it was culling 40 jobs to cope with the lower-than-expected demand.
The company blamed the tough economic conditions for the sharp decline in its Express parcels division. This segment of the operation nets more than half the turnover of the entire group.
Business Post also forecast that its profits would be hit by as much as 10 percent down from last year's £20 million. "All the competitors we have spoken to have said the same thing: all are suffering from a significant decline in economic conditions with consumer concerns rippling through the economy and hitting [business-to-business] services," said Peter Fitzwilliam, the finance director at Business Post. He added that even though the company had begun the year riding high on the 8 percent surge in its Express division's volumes, these had quickly hit the trough but the end of August and had slid to below 2004 levels.
Homeserve and International, the other arms of its parcels business posted strong double-digit growth in the five months up to August. The volume of decline in Express had slowed down by September and it is expected that the revenues would be 3 percent higher than last year's at the same time. "The rate of decline appears to have slowed in September and Express revenue for the first half is now expected to be 3 percent above last year," the company said in a trading update.
In May the company had said that it had posted a 7 percent increase in group annual profits and was in line to grow by over 25 percent. This latest trading update caused Business Post shares to plunge by 25 percent to 492 pence.
Posted
on : Fri, 23 Sep 2005 07:05 GMT | Business News
By : Pippa Fielding
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