Remaining confident

We’ve issued a trading update for the first three months of the year

A strong revenue performance across the Group means the Company is remaining confident in its outlook, despite ongoing uncertainty.

That comes as we’ve shared an update to the markets on our performance in the first three months of the year, ended June 2021.

The results compare our performance to the first quarter last year, which coincided with the first lockdown in the UK, when non-essential shops were closed and online shopping boomed.

Chairman, Keith Williams, said: ‘For Royal Mail, as expected, parcel volumes decreased and letter volumes increased compared to the exceptional period last year encompassing the UK’s first lockdown, when non-essential retailers closed for the first time. We are starting to see evidence that the domestic parcel market is re-basing to a higher level than pre-pandemic, as consumers continue to shop online.’

The great news is that revenues – that’s the money we make overall, not profit – are up compared to the same period last year.

Royal Mail revenue increased 12.2% year on year.

The numbers show that total parcel volumes are down year on year – by 13%. 

But the signs are that parcel volumes are re-basing at a level than was higher than pre-pandemic.  Compared with 2019/20, total parcel volumes are up 19%, and domestic parcel volumes are up around 35% in two years.

Letter volumes excluding elections are up year on year with a 22% increase. This is from a low base though – most businesses weren’t open this time last year. And overall they are still in decline - compared to 2019-20 they’ve fallen 18%.

‘The first quarter saw a strong revenue performance across the Group, with both Royal Mail and GLS reporting higher revenues than the prior year,’ said Keith.

‘For GLS, as expected, parcel volume growth continued albeit at a slower rate, due to the exceptionally strong comparators from the same period in 2020-21.

‘As pandemic restrictions continue to ease there is still uncertainty about levels of Covid transmission, the impact on consumer behaviour and economic factors such as GDP growth and inflation, all of which will impact on future performance.

‘We continue to expect fluctuations in volumes as we emerge from Covid restrictions, which we will need to manage accordingly. Nonetheless we are encouraged by the revenue performance across Royal Mail and GLS in the first quarter, and notwithstanding the current uncertainty, remain confident about the full year.’

Click here to read our trading statement in full.

21 Jul 2021