The seemingly innocent use of the word ‘broadly’ in a pre-close update sparks a 12% sell-off in the shares of parcel delivery company UK Mail’s (UKM), to 495p. The slump highlights investor jitters over parcel companies after a sequence of bearish trading statements from listed firms across the sector.
In a statement ahead of a half year results announcement on 18 November, UK Mail reports trading is 'broadly in line with expectations.' First half revenue will be the same as the six months to end-September 2013, after adjusting for fewer trading days in the period. It highlighted more challenging conditions in the second quarter with the larger declines in volumes in latter weeks.
Analysts at Investec reduced their target price on the stock from 700p to 600p, citing a more challenging backdrop and an absence of the usual seasonal pick-up in volumes.
'This appears to be an industry-related theme, we believe, and at this stage it is not possible to say whether it is a market slowdown or a later start to the normal seasonal pick-up than in past years,' the analysts say.
UK-focused Royal Mail (RMG) warned in July of falling volumes, as highlighted in Shares, but the deterioration is also being felt on the continent as well. Netherlands-based TNT said yesterday that ‘overall trading conditions in Europe have deteriorated further.'