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FedEx contract update / BBC TV licensing contract win PDF Print E-mail
Tuesday, 06 February 2007

FedEx

Business Post Group plc announces that, further to its statement on 18 December 2006 regarding FedEx Corporation’s intention to terminate the Group’s contract as its Global Service Participant in the UK, the terms of that termination have been satisfactorily agreed. The contract will now terminate on 30 April 2007 with the people and dedicated assets related to the contract and associated costs being transferred to FedEx. This early termination avoids the potential for an increasingly unprofitable run-down of the contract over the full term of the original notice period.

In the year to 31 March 2007 the FedEx contract will generate revenue of approximately £19m, and a profit contribution of some £2m. Business Post will incur an exceptional cost in the current financial year of some £1m relating to contract exit costs.

Guy Buswell, Chief Executive of Business Post, said:

“We are pleased to have reached an agreement with FedEx. We wanted this early termination to allow us to focus our resources immediately on the development of the new, longer term opportunities now open to the group,”


BBC TV Licensing

Business Post’s mail company, UK Mail, the leading competitor to Royal Mail in downstream access postal services, has been awarded a major new contract with BBC TV Licensing worth up to £8.1 million of revenue per annum .

The BBC began trialling UK Mail’s services in October. During this period substantial cost savings were identified along with an improved flow of calls to its call centre.

TV Licensing sends out approximately 61 million items of mail a year. All presorted mail will now be dispatched via UK Mail’s downstream access model whereby mail is collected and sorted at its national network of 58 sites on a daily basis.

The contract with BBC TV Licensing will commence on 1 April 2007.

Business Post will provide a close period trading update on Wednesday 4 April 2007, ahead of its preliminary results announcement on Wednesday 23 May 2007.

 
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