Royal Mail updates on trading
Thursday, September 23, 2021
Royal Mail addressed letter volumes have bounced back in the group’s latest trading update, but are still down nearly 20% on the equivalent period in 2019.
Royal Mail is currently providing bi-monthly trading updates due to the “unprecedented impact” of the Covid-19 pandemic.
For the five months to the end of August, total letter revenues were up 18.3% year-on-year, and down 7.3% on the same period in 2019.
Addressed letter volumes, excluding elections, were up 13% year-on-year, but down 19% on 2019, “reflecting the ongoing structural decline in letters”.
Total letter revenue grew by 18.3% year on year, reflecting volume growth and positive price/mix, Royal Mail stated.
First class stamps went up by nearly 12% at the beginning of the year.
Domestic parcel volumes slipped by 5% compared with last year’s dramatic spike in online ordering caused by the pandemic, but still jumped by 34% on 2019 for the period.
Domestic parcel revenues were up 4.1% and 44.5% respectively.
The business delivered 546m domestic parcels in the period this year, compared with 409 during the same five months in 2019.
Royal Mail chair Keith Williams said the first five months of its new financial year saw continued revenue growth across the group, although its international parcels business international was impacted by a number of factors including increased customs processing and reduced air freight capacity.
Williams said: "In Royal Mail, we are increasingly confident that domestic parcels are re-basing at a significantly higher level than pre-Covid and believe we are maintaining our share of the market.
“Domestic parcel volumes are up around a third compared to pre-Covid. Domestic parcels performance continues to be more robust against ongoing challenges in international. Whilst we continue to expect further normalisation of parcel performance as we unwind from the pandemic and anticipate some upward pressure on costs, both adjusted operating profit and margin are expected to be higher in H2 compared to H1."
Group adjusted operating profit for the first half of 2021-22 is expected to be £395m-£400m, with at least £230m coming from Royal Mail.