UK Mail Group had previously warned that it had problems and it did. One of the problems was that management appeared not to know how to resolve them or did not understand what they were, Anyway fear not. Those responsible are still happily at the helm making more promises about the future.
Things are so bad that the interim divi has had to be cut from 7.3p to 5.5p per share. Bear in mind that in 2010 and 2011 the interim divi was 6.4p which means that in 5 years UK Mail has gone nowhere except downhill.
Profit before tax has slumped from £12m. to £2.2 for the half year to the end of September and whilst revenue did rise by 4.5% that is not much good if you can not manage the business properly. Cash of £9.5m a year ago has disappeared and been replaced by net debt of £12.7m. and there is not a single word of explanation as to why.
UKM is yet another company which had to enter a period of transition only to find that management was not able to carry out the transition as expected.
Amazingly expectations for the current year remain in line with previous guidance but expectations for next year have “softened slightly” because of “the timescale required to fully resolve the challenges” That means that they messed up big time on the timescale, on the challenges and on the solutions but do not want to admit it.
They say they are confident of their ability to restore the parcels business to previous levels of profitability. The failure to do so is apparantly due to managements inability to cope with the challenges. Simple answer – get in some new management then.
Two years ago the CEO claimed to have installed a “platform for growth” but 2014’s figures were flat so it was known then that growth had virtually disappeared, since when there has been a full 12 months to take remedial action and it looks like they claim to need another 18 months.
No wonder the share price has collapsed today by a further 37p (10.16% ) to stand at 327p. as against 537p as recently as July.
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