TNT UK made a pre-tax loss for the fourth year running in 2017, during a lengthened reporting period that brings the company in-line with parent company FedEx’s financial year.
For the 17 months ended 31 May 2017, the business reported a pre-tax loss of £34.3m; a greater loss than that of £22.1m in its previous reporting period to the end of 2015.
In its strategic report TNT UK said £5.7m of the loss was down to exceptional transformation costs, and said the company had also suffered at the hand of foreign currency exchange rates.
TNT reported gross profit of £58m but this was counteracted by administrative costs of £90m.
However the business did see healthy turnover growth of 43% to £1bn (2015: £717m). This was a result of changes to pricing during the 17-month period, it said.
The accounts to not incorporate damage from the cyber attack the company fell victim to last June; just outside of the reporting period. However the accounts do list the attack as a post-balance sheet event.
The report said: “While TNT Express operations and communications were significantly affected, no data breach or data loss to third parties is known to have occurred”.
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It added that “substantially all of TNT Express’s critical operation all systems have been fully restored” as of February this year.
Parcels analyst Frank Proud, director of Apex Insight, said that given its integration with FedEx ,TNT’s results for the period could be of little significance.
He told MT: "Given the integration these figures might not be very meaningful. In many ways, performing at the same level with all the uncertainty of the merger is not a bad result."
He added that TNT was sold because it was struggling, and was never going to be a quick fix.
Proud said: “I think this will be a long-term fix. TNT has underperformed the market for the last few years. Its underperformance is what led to it being taken over and it will take time to turn round. I wouldn't expect to see major changes until FedEx starts to merge the networks, and they will go cautiously with that to avoid things going wrong.”
TNT parent group FedEx UK also saw a drop in performance for the year ended 31 May 2017. Its turnover fell 3% to £245m (2016: £253m) while its pre-tax profit fell by a third to £22m.
TNT and FedEx had not responded to a request for comment at the time of publication.
