Royal Mail reports 1% rise in Q1 revenue

Royal Mail has reported a 1% rise in first quarter (Q1) revenue, supported by a good performance from GLS. GLS volumes and revenues were up 5% and 6% respectively. And when the impact of recent acquisitions are included, GLS revenue was up around 18% on a constant currency basis.

Focusing on the international acquisitions, Royal Mail said: “ASM, acquired in June 2016, is performing well ahead of expectations and is being integrated into GLS Spain.

“In the United States, GSO, which we acquired 9 months ago, is performing in line with expectations. On 6 April 2017, we announced the acquisition of Postal Express, an overnight parcel delivery company operating throughout the Pacific Northwest of the United States, for $13.3m. Postal Express will be integrated into GSO.”

In the UK, the parcels business helped to offset the ongoing decline in letters, with volume growth of 5% and revenue growth of 3%. Total letter revenue was down 4%, and address letter volumes were down 6%.

Commenting on the results, Moya Greene, Chief Executive Officer of Royal Mail , said: “Overall, we have had a good start to our financial year. Group revenue was up 1%, driven by another strong performance in GLS. This more than offset a 1% decline in UKPIL revenue.

“GLS continues to be a driving force for the Group. Its ongoing, focussed international expansion is increasing our geographic diversification, scale and reach. In UK parcels, our quality of service and improved product offerings are driving high levels of customer satisfaction and attracting new customers and higher volumes. Our performance in letters was better than we expected, despite continued business uncertainty in the UK.

“We remain on track to deliver our cost avoidance and net cash investment targets for the full year.”