UK Mail profits hit by HQ move
Delivery firm UK Mail has reported a sharp drop in half-year profits following problems with its new automated sorting hub in Coventry.
Shares in the company dived 16% as it cut its dividend and warned that its expectations for next year's results have "softened slightly".
Pre-tax profits for the six months to 30 September fell to £2.2m from £12m a year earlier.
The firm had warned in August of problems at its new sorting hub.
It said at the time that the new equipment had been "incompatible" with some of its parcels.
UK Mail's previous headquarters in Birmingham was compulsorily bought by HS2 earlier this year.
It has been compensated £6.8m by the Department of Transport and HS2, and will get another final compensation payment of £10.3m in December.
But the move to its new headquarters in the former Peugeot car factory site in Coventry has caused problems.
UK Mail chief executive Guy Buswell said: "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.
"However, due to the timescales required to fully resolve the challenges, our expectations for the next financial year have softened slightly."
Group revenues grew by 4.5% to £237.6m, and when one-off items are stripped out underlying pre-tax profits were £4.9m, down from £11.2m last year.
UK Mail said it would pay in interim dividend of 5.5p per share, compared with 7.3p a year earlier.