Whistl UK reported a £4.7m pre-tax loss in 2019 as it battled to remain competitive in the parcels and Downstream Access (DSA) markets as start-up inefficiencies racked up at its Bedford ‘super hub’.

However, group revenues rose by 12.6% to £635m for the year ending 31 December 2019 and it enjoyed a 22% increase in turnover in its parcels and international divisions.

During the period the company opened a new hub in Bedford for mail and parcels and it said a fall in underlying EBITDA from £10.2m to £7.1m was caused mainly by “start-up inefficiencies” as well as strong competition in DSA, which put pressure on margins.

Whistl UK focuses on four areas of deliveries, with its Royal Mail onward delivery service - DSA – enduring price increases from the postal service during the period as it attempted to compensate for volume reductions.

In its strategic report, Whistl said: “We have no choice but to pass these increases onto our posting customers.

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“We continue to express our concerns to Ofcom about the impact of price increases on mail volumes and continue to advocate for efficiency targets to be imposed on Royal Mail.”

The opening of the Bedford superhub helped parcel volumes grow by 4.4% and it said it had become increasingly profitable as it offered more tracked services for customers.

“Volume growth is being driven by e-commerce, which the ONS said in 2018 now accounts for 18% of all retail sales in the UK,” it said.

Whistl UK added that Covid-19 was helping it benefit from double digit percentage growth in the parcels market, as well as in its fulfilment business: “The core mail business initially experienced a reduction in volumes as a result of the pandemic,” it said.

“However, more recent trading has indicated a gradual recovery in volumes occurring as government restrictions start to be relaxed.

“We expect mail volumes in 2020 to be lower than in the previous year with a substantial recovery anticipated by the second half of 2021.”