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Business Post Group plc the UKs leading independent express delivery company Interim Results Presentation November 2005.

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Presentation on theme: "Business Post Group plc the UKs leading independent express delivery company Interim Results Presentation November 2005."— Presentation transcript:

1 Business Post Group plc the UKs leading independent express delivery company Interim Results Presentation November 2005

2 2 Presenters Paul Carvell - Chief Executive Peter Fitzwilliam - Finance Director Guy Buswell - Managing Director, UK Mail

3 3 Programme IntroductionPaul Carvell Financial ResultsPeter Fitzwilliam Parcel ServicesPaul Carvell Specialist Distribution ServicesPaul Carvell Mail ServicesGuy Buswell ConclusionPaul Carvell

4 4 Key Points reduced profit reflects poor economic conditions in two parts of Parcel Services - Express and franchises Specialist Distribution and Mail Services trading well trading conditions in Parcel Services worse since 21 September Board remains confident of the business model and the Groups long-term potential

5 5 Summarised Income Statement 6 months to 30 September2005 £m 2004 £m Change Revenue133.0109.9+21% Gross profit22.122.8-3% Overheads - as before, but pre-goodwill(15.3)(13.6)+12% - new IFRS share costs(0.5) Operating profit under IFRS6.38.7-28% Interest(0.1) Profit before exceptional charge6.28.6-28% Exceptional provision(3.2)- Profit before tax3.08.6 Tax(0.7)(2.7) Profit after tax2.35.9

6 6 Group Revenue Per Working Day

7 7 Parcel Services 6 months to 30 September By Value By Proportion 2005 £m 2004 £m Growth2005 % 2004 % Revenue Express67.565.6+2.9%5160 International15.213.6+12%1112 HomeServe15.010.8+39%1110 97.790.0+8.6%7382 Operating profit Normal trading11.515.0 Franchise support(1.5)- Exceptional provision(3.2)- 6.815.0 Margin Adjusted for exceptional provision10.2%16.7%

8 8 Parcel Services – Profit shortfall £m Volume(2.0)Growth was 4% below expectations Price(0.9)1% increase achieved vs 2% expected Cost - one-off redundancy/restructuring(0.5)H2 will benefit by £0.7m - higher fuel and other costs(0.7)Recovered in surcharge and Central (4.1)

9 9 Specialist Distribution Services By ValueBy Proportion Year to 30 September2005 £m 2004 £m Growth2005 % 2004 % Revenue UK Pallets13.611.3+20%10 Courier6.86.2+10%56 20.417.5+16.6%1516 Operating profit1.50.7 Margin7.4%4.0%

10 10 Mail Services By ValueBy Proportion Year to 30 September2005 £m 2004 £m Growth2005 % 2004 % Revenue14.62.1+595%112 Operating profit1.1(0.5) Margin7.5%(24%)

11 11 Central 2005 £m 2004 £m Change Revenues0.3 Operating profit(6.3)(6.5)-3% Percentage of Group revenue4.7%5.9%

12 12 Summarised Cash Flow Statement 6 months to 30 September2005 £m 2004 £m Profit before franchise costs7.78.6 Depreciation and share-based charges3.12.6 Franchise indebtedness(1.8)(0.2) Working capital(1.4)(2.8) Tax(2.6)(2.5) Operating activities5.05.7 Capital expenditure(5.7)(4.5) Dividends and financing(6.9)(6.7) Net cash flow(7.6)(5.5)

13 13 Summarised Balance Sheet at 30 September2005 £m 2004 £m Property, goodwill and other non-current assets48.045.6 Deferred tax on share-based incentives under IFRS0.41.1 Net current assets excl. cash/debt23.722.3 Non-current liabilities(1.8)(1.6) Net debt(12.2)(10.1) Net assets under IFRS58.157.3

14 14 Segmental profits 2004 (£m)2005 (£m) H1H2FYH1H2FY Parcel Services15.015.330.310.0 Specialist Distribution0. Mail Services(0.5)0.5-1.1 Central pre-share costs(6.0)(5.4)(11.4)(5.8) Interest(0.1)(0.2)(0.3)(0.1) Profit pre tax and IFRS9.111.420.56.7 IFRS share costs(0.5)(0.4)(0.9)(0.5)(0.7)(1.2) Pre-tax profit8.611.019.66.2

15 15 Parcel Services Express (B2B)InternationalHomeServe (B2C) Network Services Revenue 73% (2004: 82%) Profit 79% (2004: 99%)

16 16 Express 1.3% growth in revenue per day, reducing as the period progressed, reflecting increasingly difficult economic conditions pricing competitive we believe weve maintained market share

17 17 Express Revenue Per Working Day

18 18 International 10% growth in revenue per day FedEx increase was slightly less non-FedEx increase was more, reflecting recent success of Eurodis arrangements and international mail International Mail will transfer to Mail Services FedEx contract renewal subject to competitive tender

19 19 HomeServe 37% growth in revenue per day, ahead of expectations Walsh Western a substantial contributor to growth evening deliveries increasing H2 volumes weaker

20 20 Network Services quality of service maintained throughout investments in infrastructure H1 fuel costs of £0.4m recovered through surcharges redundancies, restructuring, productivity initiatives

21 21 Franchises – the past network is dependent upon each and every location loans and advances have existed since 2001 exposure increased by £1.4m to £3.2m during 2005 position deteriorated by £1.5m in first five months of 2006 from franchise trading losses Business Posts financial exposure has been cleared by expensing to P&L

22 22 Franchises – the future small amount of local underpayment, eg FedEx, evening deliveries, linehaul, will be redressed certain amount of regional difficulties, eg SE England, will be redressed primarily a volume issue leading to losses central resource allocated to supplement franchise sales effort tight monitoring of performance those that wont survive are provided for in provision and reduced expectations

23 23 Specialist Distribution Services UK Pallets UK TodayBusiness Post Technical Couriers Revenue 15% (2004: 16%) Profit 12% (2004: 5%)

24 24 Specialist Distribution Services UK Pallets exceeding expectations expansion of sales team (20% y-o-y growth) improvements in operational management on track for significantly improved performance UK Today being rewarded for focus on quality (15% growth) Business Post Technical Couriers flat top line but profit margins improved under new MD

25 25 Mail Services Revenue 11% (2004: 2%) Profit 9% (2004: -3%)

26 26 UK Mail excellent progress, ahead of the Boards initial expectations 2% market share means we are c.6 months ahead of schedule profit of £1.1m (2004: loss of £0.5m) matches market share unsorted mail business successfully launched

27 27 UK Mail Revenue Per Working Day

28 28 UK Mail – Plans for the current year and beyond sorted mail unsorted mail SME market

29 29 Parcel Services Consignments Per Working Day

30 30 Longer Term Prospects Board expects resumed progress Boards confidence in Groups long-term potential remains

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