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UK Mail Group plc
("UK Mail" or the "Company")
Annual Financial Report 2015
Notice of Annual General Meeting 2015
Proxy Form
The Company has today published the following documents on its website, www.ukmail.com:
· Annual Report and Accounts 2015
· Notice of Annual General Meeting 2015
· Proxy Form
A copy of the above documents has been submitted to the National Storage Mechanism and will shortly be available for inspection at: www.Hemscott.com/nsm.do
The Company will hold its 2015 Annual General Meeting at the offices of Investec, 2 Gresham Street, London, EC2V 7QP on Wednesday 8 July 2015 at 12:00 noon.
Attached to this announcement is the additional information required under Rule 6.3.5 of the Disclosure and Transparency Rules of the Financial Conduct Authority, including a description of the principal risk factors for the Company, as set out in the Annual Report and Financial Statements 2015, and a statement of directors' responsibilities.
ADDITIONAL INFORMATION
Principal risks and uncertainties
The principal risks and uncertainties to achieving the Group's strategic priorities together with our mitigating activities are outlined below. Further information on how the Group manages risk is detailed on pages 34 to 43 of the corporate governance section within the Annual Report and Accounts 2015.
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Risk |
Potential Impact |
Mitigation |
Assurance |
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Potential operational and financial impact resulting from the relocation of the National hub (increase in risk)
The Group is in the middle of a relocation process to a new National hub at Ryton following contractual agreement with HS2 Ltd to acquire the National hub at Birmingham.
Whilst construction has been completed the hub will not be fully operational until mid-2015.
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The Group could be exposed to a number of unforeseen costs or expenditure, for which no compensation will be received.
Management is distracted from the achievement of day-to-day objectives to management of the move.
Loss of key personnel affected by an increased commute and/or unwillingness to relocate.
Loss of customers should service levels deteriorate.
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Regular meetings and discussions are held with HS2 Ltd, with agreement in principle reached prior to the commitment of funds.
The relocation is being closely managed by a dedicated HS2 steering group.
Plans are in place to retain employees during and after the move.
Regular monitoring by operational management of service level performance.
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The Board monitors the HS2 plan on a periodic basis, and receives regular reports from the Group Finance Director, Head of HR, the Group Operations Director and the steering group.
Contingency plans have been reviewed and approved.
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IT Systems failure (no change in risk)
Reliance is placed upon the proper functioning of IT systems for the effective running of operations.
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Any prolonged interruption to the Group's IT systems could have a materially adverse effect on its business.
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The Group has a Business Continuity Plan in the event of IT systems failure. Networks are protected by firewalls and anti-virus protection. Systems are backed up, and offsite disaster recovery facilities exist in the event that a major issue affects one of our key locations.
Executive Director approval is required for any material system changes. A full implementation review and/or parallel running is/are undertaken by the sponsoring department and IT prior to any new system 'go live'.
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Continued investment in IT infrastructure.
Core areas of the Group are subject to certification including ISO 27001.
Internal IT department constantly monitors threats to data protection by viruses, hacking and breach of access controls.
Deloitte LLP have been appointed as the Group's 'internal IT audit' resource to provide specialist expertise. |
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Competitive (no change in risk)
The Group operates in highly competitive markets and faces competition from international, national, regional and local companies, as well as the Royal Mail.
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Increased competitive activity could lead to an adverse effect on results, either through loss of customers or pressure on margins, putting growth, profitability and cash flow at risk.
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Market activity, and competitor behaviour, and trading opportunities are regularly reviewed.
Dedicated customer account teams exist for larger accounts.
Hierarchal approval for customer rates charged.
The Group seeks to expand the available market through the introduction of new products and services.
The Group's customers are spread across a large number of business sectors and wide geography.
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Competitor activity is monitored at both a strategic and tactical level to enable suitable actions to be developed in response.
Feedback from customers, including complaints, together with the findings from customer satisfaction surveys are routinely monitored, discussed and action plans developed as appropriate.
The Group's performance against KPI's is reviewed by Operating Board Directors and at Main Board meetings. |
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Business continuity (no change in risk)
The Group could be materially affected if there was a significant incident such as a terrorist incident, fire or flooding, particularly at one of the major hubs.
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Severe disruption and reputational damage to the business, which would ultimately impact on the Group's financial performance.
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Business Continuity Plans are in place for each site, and tested on a rotational basis. |
Disaster Recovery and Business Continuity plans are regularly reviewed and tested at frequent intervals.
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Legislation and regulation (no change in risk)
The Group is subject to numerous laws and regulations, with the mail market additionally regulated by the Office of Communications ('Ofcom').
The Group, in common with many businesses, is subject to litigation from time to time.
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Failure to comply or respond could lead to financial loss, either from financial penalties or damages, redeployment of management resource, or reputational damage to the Group.
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The Group keeps abreast of forthcoming legislative and regulatory changes, and maintains controls and procedures to ensure full compliance.
The Group maintains active engagement with Ofcom, responding to consultations, when relevant.
The Group maintains both in house and external legal expertise.
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The Board reviews reports from senior executives including the Group Legal Manager.
The Group is subject to various audits and compliance visits from both external bodies and in house internal audit and security teams.
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Fuel (decrease in risk)
Fuel shortages or strikes could affect the Group's operations.
Fuel costs could increase significantly more than forecast.
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Any prolonged interruption to the Group's fuel supplies could have a materially adverse effect on its business.
Higher fuel costs could lead to reduced margins and profitability if they cannot be passed on to customers. |
The Group has an established fuel contingency plan.
In common with industry practise, the Group operates a fuel surcharge mechanism, whereby increases in fuel prices are recharged to the majority of the Group's customer base.
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The fuel contingency plan is reviewed and tested at frequent intervals.
The Board monitors both the fuel price and the fuel surcharge mechanism on a periodic basis. |
Related parties
The Company's related parties together with details of material transactions and year-end balances with them are detailed in Note 30 of the Annual Report.
Statement of directors' responsibilities
The directors are responsible for preparing the Annual Report, the Directors' Remuneration Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the Group and Parent Company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing these financial statements, the directors are required to:
· select suitable accounting policies and then apply them consistently;
· make judgements and accounting estimates that are reasonable and prudent;
· state whether applicable IFRSs as adopted by the European Union have been followed, subject to any material departures disclosed and explained in the financial statements; and
· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy, at any time, the financial position of the Company and the Group and enable them to ensure that the financial statements and the Directors' Remuneration Report comply with the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of information on the Group's website - www.ukmail.com. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
The directors consider that the Report & Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's performance, business model and strategy.
Each of the directors, whose names and functions are listed on page 37 confirm that, to the best of their knowledge:
· the Group financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Group; and
· the Strategic Report contained in the Report & Accounts includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.
A list of current directors of UK Mail Group plc is maintained on the UK Mail Group website, www.ukmail.com.
Steven Glew
Company Secretary
11 June 2015
About UK Mail
UK Mail Group plc is one of the leading independent parcels, mail and logistics services company within the UK and one of the main alternatives to Royal Mail for business mail requirements. More information is available at www.ukmail.com
This information is provided by RNS
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