Royal Mail parcels up, letters solid

Royal-Mail-parcels up, mail bullishRoyal Mail has delivered some post-Christmas cheer to shareholders by revealing a 4% increase in parcel deliveries over the festive period, with letters also holding up well.
The postal giant saw a 1% decline in its parcel revenue in the first half of the year, but today’s trading update showed the first nine months of the year matching parcel revenue from the same period last year, with volumes up 3%.
Parcel volumes benefited from growth in import parcels, and from a number of initiatives launched earlier in the year targeting customers in new sectors, along with the expansion of the service at the weekend.
The company said it handled 120 million parcels in December alone, 4% more than last year.
Moya Greene, the Royal Mail chief executive, said: “We started to plan for Christmas in April, putting investment behind extra sorting capacity with 10 temporary hubs and training around 19,000 extra people. As a result, Royal Mail was able to provide customers with reliability, flexibility and high quality delivery at a competitive price.”
Meanwhile UK addressed letter volumes at Royal Mail fell 3% year-on-year in the nine months, but revenue held strong. Greene said letters performed in line with expectations as the 3% volume decline was better than the 4-6% per year forecast, and was helped by an improved UK economy.
“We are continuing to bear down on costs and expect that underlying operating costs before transformation costs in UK Parcels, International and Letters will be flat for the full year. Given our performance over the Christmas period, we are confident that the outcome for the full year will be in line with our expectations,” Greene added.

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