Business Post H1 profit up, key Xmas looms

[TrueBlueTerrier]

http://www.reuters.com/article/marketsN ... 4920081119

* Says parcels market will be tough over Xmas

* Says H2 trading in line with expectations

* Considering acquiring struggling rivals

* Shares rise 4.6 percent in early trade

By Rhys Jones

LONDON, Nov 19 (Reuters) - Britain's Business Post on Wednesday said the upcoming Christmas period would shape its full-year performance after it posted a 25 percent increase in first-half profit on strong growth in its UK Mail unit.

The bulk and parcel delivery company, which collects some 1.7 billion mail items per year, said pretax profit for the six months to Sept. 30 rose to 6 million pounds ($9.03 million) on revenue 16.3 percent higher at 194.5 million pounds. The group held the interim dividend at 6.4 pence.

"The parcels market tends to track consumer spending and the next six weeks will be very important to us. We make deliveries as a result of internet purchases, which look good, but we also feed wholesalers and retail shops who are struggling and if their sales aren't so good, then neither are ours," Chief Executive Guy Buswell told Reuters in an interview.

Shares in BPG rose as much as 4.6 percent to 290 pence in early trade but had slumped to be 0.8 percent down at 264.5 pence by 0944 GMT. However, Seymour Pierce analyst Kevin Lapwood said the shares would "continue to perform well ahead of the Christmas on-line shopping season."

A poll of analysts by Reuters Estimates forecast BPG would make an average pretax profit of 17 million pounds for the year to the end of March, 2009.

Buswell said the group would be open to consolidating the delivery industry if its smaller rivals struggle in the downturn.

"One or two operators are quite indebted and will probably struggle. I don't know any parcel carrier that has managed to consolidate networks and make money but we're certainly open to suggestions if anything was to happen," said Buswell.

BPG's UK Mail, its alternative to the state-owned Royal Mail, saw its operating profit rise 30 percent due to operational improvements and new contract wins.

The group's parcels business, which last year underwent a restructuring programme, saw operating profit slide 4.6 percent as margins fell due to fluctuating fuel prices.

Specialist services, made up of the group's palletised goods delivery and same-day courier activities, increased operating profit by a third following a marketing push during the period.

Business to business parcel volumes were up 6.1 percent but business to consumer was down 2.7 percent but the trend is improving, said the group.