Business Post wins BBC TV Licensing mail deal worth up to 8.1 mln stg per year

Business Post wins BBC TV Licensing mail deal worth up to 8.1 mln stg per year

	Published : Tue, 06 Feb 2007 08:39 By : Agencies Print this Story

LONDON (AFX) - Business Post Group PLC said it has won a contract worth up to 8.1 mln stg a year to collect and sort mail for BBC TV Licensing.

Business Post said its postal arm UK Mail had won the deal with TV Licensing, which sends out about 61 million items of mail a year.

The company said the BBC began to trial UK Mail's services in October and identified substantial cost savings during the period along with an improved flow of calls to its call centre.

All pre-sorted 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 begins on Apr 1 2007.

Business Post said it had also agreed the terms of the termination of a contract with FedEx Corporation.

The contract will now terminate on April 30 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,' Business Post said in a statement.

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

Chief executive Guy Buswell 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.'

philip.waller@thomson.com

paw/nes

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.

AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited