Business Post dives on profits alert

THERE was a heavy thud in shares of Business Post today after it admitted profits will miss most City analysts' forecasts.

Shareholders have enjoyed four years of almost unbroken share price rises at the courier group. The stock more than quadrupled on expectations of fat profits from the company entering the postal market and breaking up the Royal Mail monopoly.

But the revelation that group pre-tax profits for the year to 31 March will come in below the £21.5m expected extended the stock's recent fall to 15%, diving 38p today to 605p.

While its UK Mail subsidiary is beating targets by hitting breakeven within its first year of operation, Business Post has been hit by unexpected costs in servicing the boom in the internet shopping home delivery market, especially during the peak Christmas season and a poor performance at its UK pallets business.

Bought less than two years ago for £12m, the pallets arm made just £800,000 last year.