Half Year Results 2023-24
This morning, we’re presenting our Half Year Results for 2023-24 to the market.
Despite challenging macroeconomic factors, Royal Mail’s half year performance has been in line with expectations:
- Royal Mail made an adjusted operating loss of £319 million
- Revenue has fallen 2.9% to £3.5 billion
- Parcel volumes were down 6% although this is slightly better than the domestic parcel market in the UK, with data suggesting we saw a c.7% decline overall
- Letter volumes have fallen 9%, but with price increases letter revenues increased slightly by 1%
At a Group level, even though GLS made a profit, Royal Mail’s performance means International Distributions Services made an adjusted operating loss of £169 million overall.
Although we have performed as expected, we cannot lose sight of the fact the business is still losing money every day. Transforming Royal Mail from a loss-making business, in a fast moving and competitive market, is not easy. There is no silver bullet.
We are making progress but there is hard work to do
- We have stabilised the business through rigorous cash management, controlling costs, and prioritising our activity
- We’ve made good progress implementing the changes set out in the CWU agreement reached in the summer
- We are entering a new period of stability, and as a result customers are coming back– but we need to deliver great quality to win back more of their volume
- We are now looking at strategic development, including how we can better serve our customers in a changing environment
We are gaining momentum and putting in place the foundations for future growth. There’s no doubt there is hard work ahead and quality isn’t going to be fixed overnight, but the business is heading in the right direction.
Improving quality of service and We Are Christmas
Despite making progress in many areas, we have fallen short of the high quality of service standards our customers expect. Over the quarter up to 24 September 2023, Royal Mail delivered 91.3% of Second Class mail within three working days and 74.1% of First Class mail within one working day.
Improving quality of service has to be our top priority. This Christmas is a golden opportunity to show everyone why Royal Mail should be the carrier of choice, and why they should give their business to us. The We Are Christmas campaign and peak incentive is designed to keep everyone focussed on delivering over the peak period.
Looking to the future
As we enter the second half of the financial year, there is reason for us all to be optimistic.
We are transforming but can’t do it all on our own – we also need the Government and Ofcom to do their bit by ensuring that we have a modern and sustainable Universal Service.
By delivering our transformation, and with the regulatory change we need, Royal Mail can reach its true potential and have a bright future.
Right now, it’s about delivering a successful peak – so let’s all focus on delivering a brilliant Christmas for our customers.
