Fast growing Business Post, the Midlands-based express mail and parcels delivery group, is looking forward to a buoyant festive trading period - and a possible Christmas Eve present from mail regulator PostComm which could eventually double its turnover, it emerged yesterday. Business Post hopes that Post-Comm will hand down a final ruling on the tariff for access by subsidiary UK Mail to Royal Mail's delivery network. UK Mail will then collect post from customers and process it through its network of 64 sites - the largest of which is in Birmingham - before passing it on to Royal Mail for "final mile" delivery by local postmen. Talks with Royal Mail on payment for the service broke down last year and Business Post is awaiting the verdict from the industry regulator on when its new subsidiary can begin trading. Business Post has held its licence to deliver bulk business mail since 2001. Postcomm's decision is expected to act as a benchmark for other private firms hoping to enter the market and use Royal Mail's network. Business Post said the wildcat strikes which brought Royal Mail deliveries to a standstill last month had boosted the attraction of potential rivals such as UK Mail among customers. Chief executive Paul Carvell said the proposed service would give Business Post access to the UK's £5 billion mail market, which has been growing steadily year-on-year. The group is confident it could corner a market share of anywhere between 2.5 per cent and three per cent - worth some £150 million a year. "That could double the size of the company in revenue terms. It's a fantastic opportunity for us," Mr Carvell added. He hopes PostComm will make its decision by Christmas. A public consultation will then follow, which would take at least another two months. "Then maybe, the business will be up and running by mid-2004," Mr Carvell said. Business Post, which employs some 3,500 people in the UK - 1,000 in the Midlands and 300 at its 15-acre Birmingham site - yesterday posted a 13 per cent rise in half-time profits to £8 million, with turnover up by 23 per cent to £89.4 million, reflecting strong growth in its core parcels arm Express, which accounts for three-quarters of turnover. For the first time, Express captured seven per cent of the parcels business on the back of price offers and specific targeting of customers paying for premium services. Express generated turnover of £63 million, up seven per cent. Mr Carvell said Business Post expected to make an extra £2 million in profit in the second half to the end of March as delivery volumes swell over Christmas and the Easter periods. Demand for document delivery grows around Easter as the financial year draws to a close for many organisations. Mr Carvell is also confident that full year profits will be consistent with analysts expectations. They are forecasting pre-tax profits in the region of £18 million to £18.5 million, for the full year to March 2004, ahead of previous year's £15.1 million. "We've got that number on our side. We probably could accommodate the full year expectations," he said. Two Midlands acquisitions made during the year are also fitting in well with Business Post's operation. Weaver Pallet Express, a Lichfield-based express palletised goods delivery business, was acquired for £9 million in cash, plus a deferred amount of up to £3.5 million in cash and shares, at the end of July and is being rebranded as UK Pallets, giving Business Post a strong presence in this relatively new but rapidly growing part of the express delivery sector. Run from a national hub at Lichfield , UK Pallets handles more than 3,000 pallets per day and is estimated to be the UK's fourth largest pallet network company. In the nine weeks since its acquisition, UK Pallets generated a turnover of £3.7 million, representing four per cent of group turnover, and £100,000 of profit before tax. BXT, the Aston-based technical courier acquired in February, generated turnover in the period of £2.1 million, some two per cent of group turnover. Business Post said it was trading well and developing in line with expectations. Management is exploring cross-selling opportunities in each of its technical, medical and utilities sectors. Earnings per share for Business Post were ahead 13 per cent to 10.5p, while the company said it would pay an interim dividend of 5.95p, up six per cent. | 
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