28 March 2011 – trading update

A rather negative pre-close trading update for the year to 31 March has been released. The parcels business is being impacted by economic conditions, which is unsurprising. Profit before tax for the year which is about to end is now expected to be around £16m.

The company is planning to hold the final dividend at 11.8p per share, which will take the total for the year to 18.2p. At that price the shares are yielding 6.6%, which looks attractive especially when taking the strong balance sheet into account. Although it will not be easy for the business in the near term, we feel that it is well positioned and there is plenty of scope for the share price to rise over the medium to long term. BUY.