Competitor Watch

The latest annual accounts for DHL Parcel UK (formerly UK Mail) reveal that in the year to the end of December 2019, overall revenue fell 1.8 per cent to £471m, driven by mail volume decline.

The company made a total operating profit of £2.7m compared to a loss of £15.6m the previous year, which had been impacted by significant write-offs.

In the company’s parcels division, comprising business to business, business to customer and international parcels, revenue growth slowed by 3.4 per cent to £296m, down from 6 per cent growth a year earlier. The parcels operating margin increased to 10.1 per cent, up from 1.7 per cent in 2018, as the company benefitted from its business restructuring and investment in parcels automation.

DHL Parcel UK is continuing to invest in its parcels operation in order to improve the customer experience and competitive positioning.

In the company’s mail division, revenues fell 9.4 per cent to £175m, compared to a 6.5 per cent decline in 2018. The operating margin for mail was wafer-thin at 0.3 per cent, compared to a margin of 2.0 per cent a year earlier, resulting in an operating profit of £0.5m. The decrease in revenue was caused by the closure of non-core activities and the general reduction in the letters market where pricing remains highly competitive. The company said it continues to invest in mail.

The financial period covered by the report pre-dates the outbreak of Covid-19, however, in its strategic report, DHL Parcel UK highlighted the measures it has taken to protect its workforce including the provision of PPE, implementation of social distancing and other Government measures.

Click here to see our own financial results for the year ended 29 March 2020.