one of the UKs leading express delivery companies

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Business Post Group plc
one of the UKs leading express delivery
companies
2003/04 Preliminary Results Presentation
18 May 2004
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Presenters
Paul Carvell - Chief Executive Peter Fitzwilliam
- Finance Director Russell Hodgson - Group
Managing Director, Parcel Services
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Programme
Introduction Paul Carvell Financial Review Peter
Fitzwilliam Business Review - Parcel
Services Russell Hodgson - Other Services Paul
Carvell Conclusion Paul Carvell
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Background

• 2004 is the second year of the Three Year Plan
• 2003 was the year of investment ? modest profit
  growth
• 2004 and 2005 ? more rapid profit growth

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2004 Highlights

• Operating profits before goodwill amortisation up
  by 22
• Express improved its market share to some 7½
• Excellent progress in HomeServe
• Weaver Pallet Express acquisition, re-branded UK
  Pallets, performed well
• UK Mail signed access agreement with Royal Mail,
  permitting service to commence
• Board remains very confident re prospects for the
  short and long term

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Summarised Profit and Loss Account
2004 2003 Increase
Turnover (m) 192.7 156.3 23 Operating
profit (m) 19.1 15.6 22 Pre-tax profit
(m) 19.1 16.1 19 Earnings per share (p)
24.5 21.2 16 Dividends per share
(p) 18.0 16.9 7 pre-goodwill amortisation of
0.4m (2003 nil)
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A year of strong profit growth
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Business Unit Turnover
By Proportion
By Value
2003
2004
Increase
2003
2004



m
m
79
66
3
123.8
127.5
Express
12
11
17
18.2
21.2
International
5
9
129
7.6
17.4
HomeServe
3
5
133
4.5
10.5
Courier
-
8
-
-
14.4
UK Pallets
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1
(23)
2.2
1.7
Other
100
100
23
156.3
192.7
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Revenues per Working Day
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Operating Profit Margins

• Like-for-like 10.1 vs 10.0
• Strong prices good cost control
• Offset UK Today reductions, overhead increases
• Reported total 9.9
• UK Pallets 7.6
• UK Mail doesnt impact

Like-for-like margins improving
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Interest

• Income of 0.4m
• from franchise loans
• Payments of 0.4m
• 0.1m on overdraft
• 0.3m on UK Pallets acquisition term loan

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Summarised Cash Flow Statement
2004 2003 m m Operating profit 18.7 15.6 Depre
ciation and amortisation 4.3 3.3 Amounts due from
franchises 1.8 (0.5) Working capital (2.2) (4.7) O
perating activities 22.6 13.7 Tax (5.5) (4.9) Inte
rest hedging costs (0.2) 0.5 Capital
expenditure (5.8) (4.1) Acquisitions (9.6) (1.9) D
ividends (9.1) (8.6) Cash flow before
financing (7.6) (5.3) Financing 10.4 0.2Net cash
flow 2.8 (5.1)
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Operating cash inflows increased by 65
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Summarised Balance Sheet
2004 2003 m m Fixed assets 32.8 30.5 Goodwill
10.8 1.7 Current assets 46.8 36.5 Creditors lt1
year (30.6) (21.9) Long-term liabilities (10.6) (1
.0) Net assets 49.2 45.8 Net (debt)/cash (5.6) 1.6
Post-tax ROANA 26.5 25.1
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Strong balance sheet increase in ROANA
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Expectations for Parcel Services 2003/04

• Express focus on revenue quality done
• International new European product done
• HomeServe major account wins done
• Network Services cost efficiencies - done

Another year of substantial achievement
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Express - UK business-to-business parcels

• 66 (2003 79) of Group turnover
• Turnover increased by 3 to 127.5m (2003
  123.8m)
• Soft market conditions
• Express now has 7½ share of c1.6 billion market
• Improvements in revenue quality

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Express - UK business-to-business parcels

• Quality of revenue
• General price increases
• Customer-specific account reviews
• Premium users
• 2004/05 focus
• Yield
• New services for existing customers
• Growth

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International - International parcels and mail

• Turnover up 17 to 21.2m (18.2m)
• 11 (2003 12) of Group turnover
• Continued progress with FedEx
• International Mail growing rapidly
• Eurodis launched in January 2004
• 2004/05 focus includes Eire via Nightline

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HomeServe - UK business-to-consumer parcels

• 9 (2003 5) of Group turnover
• Growth of 129 due to targeted sales approach in
  growing market
• New contract with Walsh Western International
• 2004/05 growth will be slower but still
  substantial

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Network Services - shared infrastructure

• High quality delivery service at low unit cost
• The continuing restructuring of overnight
  linehaul arrangements has helped contain unit
  cost growth
• Franchise network remains a key strength
• 2004/05 focus on customer and staff satisfaction

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Courier - UK (same day) business couriers

• 5 (2003 3) of Group turnover
• UK Today turnover growth of 48 strained margins
• Expectations of strong profit growth in 2004/05
• BXTech, the technical courier, continues to
  progress

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UK Pallets UK palletised goods delivery

• 8 of Group turnover
• Nationwide express pallet delivery service via 70
  partners
• Handles more than 4,000 pallets a day and is
  estimated to be the UKs fourth largest pallet
  network company
• Eight month operating profit of 1.1m profit
  before goodwill and tax of 0.8m
• Acquisition multiple of 6.8x EBIT goodwill
  amortisation of 0.3m
• 2004/05 focus is on improved IT and hub extension

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giving you the choice
UK Mail - UK business mail

• Unique two-day Business Class service now
  trading
• 10 February 2004 access agreement signed with
  Royal Mail
• Successful trials in April 2004
• First commercial customer from 10 May 2004
• Progress is on track
• 5 billion p.a. market opportunity

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Current Trading

• Volumes and yield up in April
• May showing further progress to date
• Costs remain tightly controlled
• Service performance levels remain high

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Prospects 2004/05

• Express revenue quality, new services,
  high-tech recovery
• International IPF, Mail, Eire, Eurodis
• HomeServe major account wins
• Courier increased UK Today margin, expand
  BXTech
• UK Pallets new hub, IT, yield
• UK Mail successful operational roll-out

Further good progress expected in all areas
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Prospects Long Term
The Board remains very confident about the
Groups long term potential
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