Royal Mail Q3 results: On our busiest day we delivered 11.7 million parcels

Royal Mail has released a trading update for the nine months ended 27 December 2020 revealing revenue growth of 9.3% – the highest since privatisation in 2013, with parcel revenue growth more than offsetting the decline in letters.

Summary:

• An unprecedented third quarter.
• The busiest quarter for parcels in Royal Mail’s history with 496 million parcels handled.
• On our busiest day we delivered 11.7 million parcels, 32% more than our busiest day during the first national lockdown in 2020.
• Combined with increased absence rates due to COVID-19, these exceptional volumes impacted on service quality.
• Investing in quality improvements: retained around 10,000 of the 33,000 flexible workers from the Christmas peak, 6,000 additional vehicles and four temporary Parcel Sort Centres kept open.
• Addressed letter volumes (ex. elections) improved, declining by 14% in Q3 compared to around 33% at the beginning of FY2020-21.
• Royal Mail has now delivered around one billion items of PPE; we continue to prioritise vaccination letters and COVID-19 test kits.
• GLS continued to perform strongly driven by growth in B2C and international volumes.
• Group adjusted operating profit expected to be well in excess of £500 million for FY2020-21.

Keith Williams, non-Executive Chair commented: “The third quarter saw unprecedented parcel volumes in Royal Mail, driven by online shopping and the peak Christmas period, with 496 million parcels handled, the busiest in our company’s long history. The decline in addressed letter volumes slowed to 14% in Q3, with a decline of 9% in December, compared to around a third earlier in the year, excluding the impact of elections.

GLS also saw elevated volumes and delivered 228 million parcels in the third quarter, growth of 27%.

Our colleagues have worked incredibly hard to deliver these exceptional volumes at a time when many units have experienced rising levels of COVID-19 related absences, including necessary self-isolation.  I want to thank them for their extraordinary dedication.

At Royal Mail our busiest day during the quarter saw 32% more parcels delivered than our busiest day during the first national lockdown in 2020. Given these record volumes, we recognise that at times our service during the period was not always as we would have wished. But thanks to the efforts of our team, the retention of around 10,000 of the 33,000 flexible workers from the Christmas peak, and the introduction of new processes, we have been making encouraging progress. We are resolutely focused on delivering a comprehensive service despite the challenging circumstances.

We are proud to be working closely with the public health authorities to ensure the vital and timely delivery of vaccination letters and COVID-19 test kits. This all forms part of our dedication to serving our communities. We understand the importance of this mission. At all times, the safety of our colleagues and customers is our utmost priority.

Given the stronger than anticipated trading, primarily driven by further COVID-19 restrictions and improved letter volumes, we now expect group adjusted operating profit to be well in excess of £500 million for FY2020-21.”