Challenging market conditions in the UK and Europe combined with the loss of a major fashion contract saw pre-tax losses widen and turnover fall at TNT UK last year.

Its annual results for the year to 31 December 2014 showed a 2.4% drop in turn-over to £725m last year (2013: £742m). Pre-tax losses increased almost threefold to £18.6m (2013: £6.4m).

The directors’ report attributed declines to depot changes as well as major roadworks close to its sorting hubs, which it said had caused service levels to fall.

Return on capital investment also fell, partly due to the company’s vehicle replacement programme and investment in its new Swindon hub which opened last week. It said the new hub will help improve the company’s network infrastructure, enabling further growth.

However, the company continues its fight to recover ground in 2015. In August this year MT revealed a major management restructuring at TNT UK, which was prompted by declining revenues in the international division of TNT Express (MT 10 August).

The restructuring saw a number of key executives made redundant and the departure of head of TNT UK’s International division Stuart Stobie, who was replaced by TNT veteran Tony Jakobsen. HR director Sue Barnes also left the business in August.

The restructuring is part of wider moves to prepare for the parent group’s imminent sale to larger US rival FedEx for around £3bn.

The takeover is currently being examined by EU regulators, who may demand concessions such as asset sales. A bid for TNT by UPS failed in 2013 after resistance from EU regulators.

TNT said it was confident the deal with FedEx will pass an antitrust review and be completed in the first half of 2016. The company secured shareholder approval for the deal earlier this month, after issuing a profit warning.