UK Mail to shut pallets unit; says gains from City Link's troubles

Jan 13 (Reuters) - UK Mail Group Plc said it would shut its ailing pallets unit and focus on its core business, which gained from British courier and parcel firm City Link entering into administration last month.

UK Mail (LSE: UKM.L - news) said its full-year outlook for its core businesses was unchanged and that it had taken on some volumes from former customers of City Link.

The company expects to incur cash costs of about 1 million pounds ($1.5 million) and write down assets worth around 2 million pounds with the closure of its pallets unit.

The pallets unit contributed about 5.3 percent of group revenue and 2.3 percent of operating profit in the year to March 31, 2014. ($1 = 0.6598 pounds) (Reporting by Esha Vaish in Bengaluru; Editing by Gopakumar Warrier)