Royal Mail “fully meeting expectations” with good Christmas peak performance
Royal Mail has reported that its trading performance for the nine months up to 27 December 2015 “fully met” its expectations. Commenting on the results , Moya Greene, Chief Executive Officer, Royal Mail plc, said: “Once again, our postmen and women delivered a great Christmas – even better than last year’s strong performance. This is because of the commitment of our people and our investment in additional temporary staff and sorting capacity. Extensive planning, which began in the spring, ensured we had the capacity to accommodate additional volumes from our retail customers and other delivery operators.
“In the first nine months, UK parcel volumes were up 4%, with 130m parcels handled in December alone, 6% more than last year. The performance in letters improved slightly over the first half, with addressed letter volumes, excluding elections, down 3%.
“In Europe, GLS performed better than expected with volumes up 11%. Given the performance to date, we are not anticipating a decline in GLS margins for the full year. We remain on track to deliver at least a 1% reduction in underlying operating costs before transformation costs in UKPIL for the full year.”
In a statement issued this morning, Royal Mail flagged up some of the investments that it made over the nine-month period to improve our technological capabilities and enhance its offering in the parcels space. These included agreeing to buy same-day parcel delivery company eCourier in November, and acquiring NetDespatch in December.
On a less positive note, on 15 December Royal Mail announced that it had received notification of the fine from the French competition authority in relation to antitrust law breaches by GLS France. However, as Royal Mail pointed out in its announcement today, the fine of €55.1m (£40.2m) was fully provided for in its financial statements for the year ended 29 March 2015.
Looking forward, Royal Mail said that it remains on track to deliver at least a 1% reduction in underlying operating costs before transformation costs in UKPIL for the full year.
“Given the performance to date,” added Royal Mail, “we are not anticipating a decline in GLS margins for the full year. Otherwise our outlook for letter and parcel trends and other guidance remain unchanged from that set out in our financial results for the half year ended 27 September 2015.The results for the full year ending 27 March 2016 are expected to be announced on Thursday 19 May 2016.”
