UK Pallets, the pallet network owned by UK Mail Group, was rocked by a 64% collapse in year-on-year profits in the year to 31 March, its parent company has revealed.

UK Mail Group warned in April that its pallet business, which contributes 6% of its total revenues, had experienced a difficult year.

This saw Graeme Wilson replace Terry Richards in the top spot in March at the network, which saw its profit head south due to gaps in its coverage and the additional costs of providing temporary cover to ensure delivery continuity.

In its results statement today, UK Mail revealed its pallet network revenue had dipped 0.7% to £28m (2012: £28.3m) in the previous twelve month period, while operating profit was 63.8% lower at £800,000 (2012: £2.1m).

However, UK Mail backed its pallet business and said: “Network issues are now resolved and we have developed successful relationships with major hauliers which will play a major role in developing this business in the future.

“As part of our plans to re-energise this business we have appointed a new managing director and new management team to support him.

“We remain convinced that this business can be successful in a market with good long term growth prospects.”

The most recent Pallet Network Association figures, which UK Pallets is not a member of, suggest the sector is still growing albeit at a lower rate than in recent years.