Royal Mail: we continue to expect month-on-month fluctuations in parcel volumes

Royal Mail have released a trading statement detailing performance for the five months to August and the two months of July and August.

Keith Williams, Chair, commented: “The first five months saw continued revenue growth across the Group, with both Royal Mail and GLS reporting higher revenues than the prior year.”

“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.”

“GLS continues to deliver good volume and revenue growth, both year on year and against 2019. Whilst we are seeing upward pressure on costs in a number of our markets, we maintain our outlook for the full year of low single digit % revenue growth and c. 8% operating margin.”

YEAR TO DATE PERFORMANCE- FIVE MONTHS TO AUGUST 2021
Group
• Revenue: Grew by 8.2% year on year and by 17.7% compared to the same period in 2019;
Royal Mail
• Revenue: Increased by 7.2% year on year and by 12.1% vs. the same period in 2019;
• Domestic parcel revenue: Grew by 4.1% year on year and by 44.5% vs. the same period in 2019;
• Domestic parcel volume: Decreased by 5% year on year, but grew 34% vs. the same period in 2019;
• Total parcel revenue: Grew by 0.1% year on year and by 33.3% vs. the same period in 2019;
• Total parcel volumes: Decreased by 12% year on year but grew by 18% vs. same period in 2019;
• Total letter revenue: Increased by 18.3% year on year and declined by 7.3% vs. the same period in 2019.
• Addressed letter volumes (excluding elections): Increased by 13% year on year and declined by 19% vs. the same period in 2019;
GLS
• Revenue: Increased 9.3% year on year and by 30.5% vs. the same period in 2019.
• Volume: Increased by 9% year on year and by 30% vs. the same period in 2019.