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.


Online - UK MAIL

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.'

Issue Date: 25 Sep 2014