Connect Group PLC (LON:CNCT) shares dropped on Tuesday as the logistics company scrapped its final dividend after a slumping to a full year loss.
The group reported a loss before tax of £35.5mln for the year to August 31, compared to a pre-tax profit of £34.2mln last year, reflecting losses in the parcel delivery businesses Tuffnells and Pass My Parcel.
Revenue declined 3.8% to £1.5bn.
Following a disappointing performance, the company announced in June that it would close Pass My Parcel and in August deliveries and collections representing more than 95% of volumes ceased. Distribution services for remaining clients will end by January 2019.
The business, which was part of its newspaper and magazine wholesale unit Smiths News, made losses of £5.4mln for the year.
Smith News posted a 30% decline in operating profit to £25mln and a 3.5% drop in revenue to £1.3mln as newspaper sales fell.
READ: Connect Group sees annual results below expectations after tough year
Tuffnells made an operating loss of £57.7mln, down from a profit of £4.3mln last year, and revenues fell to 4.3% to £175.2mln as tough competition led to lower parcel volumes and as costs rose on the back of higher wages. Connect Group took an impairment of £46.1mln in the goodwill of Tuffnells.
The company decided against a final dividend, meaning its payout for the year was down 68.4% on 2017 to 3.1p.
"A year of significant challenge exposed weaknesses in our strategy and its execution, with a consequent impact on results,” said chairman Gary Kennedy.
“While it is disappointing not to succeed, we have taken decisive action to address underperformance and respond to the lessons learned.”
In September the group appointed Jos Opdeweegh as its new chief executive to lead a turnaround of the business. Alongside its full-year results, the company also confirmed that interim chief financial officer Tony Grace was to take on the role a permanent basis.
Connect Group plans to publish the details of its new management team’s strategy in January.
Shares fell 5% to 35.48p in morning trading.