Whistl posts record profits despite sales slip

Max Goldbart
Monday, March 27, 2017

Whistl, the UK’s second largest postal services provider, has reported a boost in underlying profits despite a dip in sales in its first full year following its MBO.

For the year to 31 December 2016, the Buckinghamshire-headquartered group posted underlying operating profit of £9.5m, more than doubling 2015’s figure of £4.4m.

However, sales fell to £591.7m, down 2.3% on the £605.6m achieved in 2015. Whistl’s Downstream Access Mail and Parcels offering generated the majority of sales, £528.4m, with the remainder made up from its Doordrop Media offering (£63.2m).

Gross profit saw a slight increase of 4.2%, from £37.3m to £38.9m while underlying EBITDA rose by almost 50% from £9.2m last year to £13.6m in its latest accounts.

Net assets also more than doubled, from £6.4m to £13.7m, boosted by increased cash reserves that rose to £22.9m from £14.4m. 

Chief executive Nick Wells said: “We are really pleased with our first set of results since the MBO. It was a solid performance in mail coupled with positive developments in our growth areas of parcels, international and doordrop. Our attention to cost efficiency and excellent customer service underpins these results and reflects the efforts of everyone within the company.

"The reduction in sales included the impact of the closure of Whistl’s final mile delivery activities in 2015 with the consequent loss of mail volumes associated with the service, together with a change in the price and mix of processed volume.

"Revenue was also lowered by an increase in customers choosing to appoint Whistl as agent, rather than principal, which reduces revenue but has no impact on volume or profitability."

Figures exclude the impact of the end-to-end (E2E) final mile delivery service, which was closed in 2015 and incurred administrative expenses that year of £18.4m, and exceptional items. 

Whistl’s MBO took place in mid-2015 after the closure of E2E, with its then owner, the Dutch delivery firm PostNL, taking a 17.5% minority shareholding stake in the company, and the Whistl management team taking a controlling stake. Whistl had been a wholly owned subsidiary of PostNL since 2011.

Whistl said 2016's solid profit rise was complemented by an increase in volumes in the three main growth areas of the business, international (30.2%), Doordrop Media (19.7%) and parcels (8.6%).

It was a successful year for contract wins for the group, with a number of significant client wins and renewals coming in the early half of the year, followed by its first Northern Ireland contract, a five-year deal to handle all government and public sector post in the country.

In July, it will consolidate its northern operations into one Bolton "super depot", which will create 33% extra capacity across its North of England operations.

Wells added: "In 2017 we are looking forward to bringing on stream our new 'super depot' in Bolton and also continue to grow our parcels and direct mail activities. We are a delivery management company that can exploit the growing ecommerce market because we have services that integrate across the whole ecommerce supply chain."

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