Courier firm UK Mail Group reported a slump in first-half pretax profit, hurt by inefficiencies in its new automated hub and lower contribution from its largest parcels unit.
The company, which provides mail, parcels and logistics services, said profit before tax and exceptional items fell 56 per cent to £4.9m. Revenue rose 4.5 per cent to £237.6m in the six months ended September 30.
UK Mail said it remains in the midst of a period of major investment and transition, the group relocated its national hub from Birmingham to Ryton in July 2015.
Guy Buswell, chief executive officer of UK Mail, said: “The current period of major investment and transition will deliver significant long term benefits.
“However, as we advised in August, it has become clear that the near-term challenges associated with the transition have been more significant than first anticipated.
“Trading in the initial weeks of the second half, and overall trends within our individual businesses, have been in line with our revised expectations.
“Our expectations for the current year therefore remain in line with previous guidance. However, due to the timescales required to fully resolve the challenges, our expectations for the next financial year have softened slightly.
“Whilst this is disappointing, the strategic rationale for the transformation we are undertaking is as compelling as ever, and we are confident both of our ability to restore our parcels business to previous levels of profitability and to build from there. The medium term operational and financial benefits will place us amongst the most efficient and competitive operators in our market.”