(Bloomberg) -- The fallout from Brexit and the UK’s cost of living crisis are fueling growth for InPost SA, the Polish parcel locker operator which nearly collapsed six years ago during its first attempt at expansion into Britain.
The scarcity of professional drivers following the UK’s decision to leave the European Union and increasing numbers of cost-conscious consumers relying on online retail will gradually boost demand for more efficient delivery options such as parcel lockers, InPost founder and Chief Executive Officer Rafal Brzoska said in an interview.
The Amsterdam-listed company has installed about the same number of lockers in the UK — its key growth market — as Amazon.com Inc., Brzoska said. And InPost’s recent purchase of UK distributor Menzies should ensure that growth volumes in Britain expand at around current levels next year, he said.
Brzoska, 46, successfully challenged both Poland’s Post and door-to-door operators with its automated parcel locker technology before expanding to other European markets. He said he doesn’t expect a quick shake up in the UK, where he’s targeting younger buyers who prefer cheaper pick-ups at its lockers than home delivery during working hours.
“I know that many businesses are escaping the UK due to Brexit. I prefer a contrarian approach,” he told Bloomberg News. “It’s pragmatic - you can’t bypass the biggest e-commerce market in Europe when you want to be number one in European deliveries.”
In 2017, InPost nearly collapsed, burdened by debt taken on to fund its initial expansion to the UK. The company was then saved by private equity fund Advent International, which acquired a controlling stake and delisted it from the Warsaw bourse. Four years later, InPost debuted in Amsterdam as a lockdown winner, with higher valuations than in Poland.
This time around, InPost is finding that western Europeans are “surprisingly positive” in their embrace of out-of-home deliveries, Brzoska said. Investors have also noticed, with InPost shares jumping 39% this year, giving a market capitalization of €5.47 billion ($5.75 billion).
The company, which also has lockers in France, Spain and Italy, expects to break-even in the UK by the end of this year. Brzoska declined to provide a margin outlook for next year, but said that inflation continued to weigh on buyers’ decisions and that it’s too early to announce the end of weak consumer sentiment.
Despite the ongoing economic uncertainty, InPost wants to grow faster than the e-commerce market in every country where it has operations. It’s annual investments, earmarked at as much as 1.2 billion zloty ($278 million), will be gradually shifted to France and the UK after building up its network in Poland, where it has more than 20,000 parcel lockers, about four times more than in Britain.
The company expects to start cross-border deliveries in the “short-term horizon.” It’s also ready to scrap combustion-fuel cars by 2035, while already operating 1,000 electric vans, the biggest such fleet in Poland.
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