UK Mail has revealed a pre-tax profit of £12.9m for the 12-months ended 31 March, down 19.5% on the previous year mainly due to a £2.2m hit from closure of four depots.
Group turnover for the year was up by 8.4% to £429m, however, when adjusted for the increase in Royal Mail prices implemented on 6 May 2011, revenue increased by just 3.2%.
The company says the results reflect UK Mail's resilience during a year of tough trading in markets undergoing fundamental changes.
Chief executive Guy Buswell says: “We have made progress in developing our business, investing in our highly efficient network, and driving down cost. We have achieved very high service levels even during peak times when we have handled record volumes, and the new products we have brought to market - such as ipostparcels.com and imail - are going well.”
In its Mail division, the company saw operating profit drop 15.3% to £10m from £11.8m the previous year, with volumes declining by 2%. Revenue was up by 14.5% to £208.1m, which takes into account the effects of the Royal Mail price increase.
UK Mail says pricing in the mail market remains very competitive, with additional surcharges imposed by Royal Mail also having an effect on margins.
Parcels revenue was up 3.2% to £172.1m, however, operating profit dipped by 4.2% to £11.6m, which UK Mail says was affected by the loss of a working day during the period (due to the Royal Wedding bank holiday) and a flat B2B market.
The company says it has continued to drive down costs in its parcels operation, including the closure of four depots during the year taking its total network to 50 sites, as well as investing in improved IT.
Revenues in UK Mail's courier business increased 6.8% to £20.5m, with operating profit rising from £2.2m the previous year to £2.7m.
The group's pallet business also revealed a strong operating profit increase of 16.1% to £2.1m on revenue up 0.5% to £28.3m.