UK business
- Money we earn in the UK down 1%*
- UK productivity performance significantly below plan at -0.2%
- UK profit of £165m, down 29%**
- We are implementing short-term cost actions, including a review of our organisational structure and management roles, discretionary spend and central costs.
UK parcels performed well
UK parcel volumes were up 6%* and the money we earn from UK parcels was also up 6%*.
Growth was driven by new business wins and more traffic with existing customers in domestic parcels:
- Tracked 24/48 and Tracked Returns, our key e-commerce products, grew by 25 per cent
- Amazon parcel traffic grew strongly due to higher volumes of letterboxable items
- Extension of customer Latest Acceptance Times for our Tracked 24 product has already won new business.
Letters market is challenging
Addressed letter volumes (excluding election mailings) were down 7%* and the money we earn from total letters was also down 7%*. We maintain our outlook of a 4-6% annual decline in addressed letter volumes (excluding election mailings) over the medium term.
E-substitution, business uncertainty and new data protection regulations, known as GDPR, continue to impact letter volumes. We are continuing to increase the efficiency of our letters operation and maximise the value of letters for our customers and our business.
*Movements in money we earn, costs, profit, margin and volumes are shown on an underlying basis unless otherwise stated. ‘Underlying’ means we have adjusted for certain items to make the results easier to compare and understand.
**Adjusted operating profit before transformation costs, on an underlying basis.
