Royal Mail reports 2% revenue increase
Royal Mail has reported a revenue of £4,829m for the half-year ended 24 September, which was an increase of 2% on last year.
The group’s adjusted profits after tax was £198m, up from £193m last year. The results were broadly positive. There is a cloud over Royal Mail’s immediate prospects as the postal operator has still not resolved its dispute with the Communication Works Union (CWU) – but the group management have said that reaching an agreement is a “priority”.
Commenting on the results, Moya Greene, Chief Executive Officer, said: “We had a good start to the year. Group revenue was up two per cent on an underlying basis. GLS delivered a strong performance with revenue up nine per cent. Outside the EU, GLS is also growing through selective acquisitions to capture higher growth markets.
“UKPIL revenue was broadly unchanged, having declined by two per cent in 2016-17. Our investment in our business is paying off. We have won new parcels business; volumes were up six per cent. There was a resilient letters performance. Our strategic focus on costs drove a one per cent underlying reduction in adjusted UKPIL operating costs (before transformation costs).
“Our performance for the full year, as always, will be dependent on the important Christmas period. We are opening six temporary parcel sort centres and recruiting over 20,000 staff. We are also extending opening hours at many of our Enquiry Offices to help retailers and consumers.
“As previously announced, we are now in external mediation with the CWU. Our priority is to reach agreement with the CWU to help underpin the sustainability of the business.”
In her review of the six-month period, Greene went into more detail on the labour situation.
“It is a difficult time for Royal Mail and its people,” said Greene. “We remain committed to resolving the key issues with the CWU in a way that appropriately balances the interests of all our key stakeholders. As one of the largest employers in the UK, we are proud to provide the best pay and terms and conditions in our sector. We remain committed to that high quality employment in a very competitive industry, where labour standards are often poor. In return, however, we need to make some changes to sustain our business now and in the future, particularly given the decline in letter volumes. This is about maintaining as many high quality jobs as possible.”
Greene continued: “We are negotiating with the CWU under the auspices of an external mediation process that both parties committed to under our Agenda for Growth (AFG) agreement. We are pleased that the AFG allows us the opportunity to seek to achieve a resolution in this way. The mediation process will need until close to Christmas to be completed, and may be longer. The talks cover pensions, pay and other issues. Our priority is to reach agreement with the CWU to help underpin the sustainability of the business. We are determined to use the mediation process to do just that.”
Breaking down the figures, the volume of addressed letters was down 5% at 5,610m but unaddressed letter volume was up 8% at 1,510m.
On the parcels front, the core network saw a 7% increase at 516m items, and Parcelforce Worldwide saw a more modest 1% increase to 47m.
UKPIL revenue was flat at £3,624m. Parcels revenue was up 5% at £1,596mb but letters revenue was down 3% at £2,028m.
