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International Distributions Services plc, owner of the Royal Mail, has published its trading update for FY2023-24.
The company released the figures on the same day it announced the appointment of Martin Seidenberg as Group Chief Executive Officer.
The key points of the trading update, according to International Distributions Services, is as follows:
- Royal Mail total revenue down 4.0% year on year in the first quarter, as expected. Domestic parcel volumes broadly as expected, with slightly weaker revenue performance due to price/mix and lower test kit volumes. Focus remains on improving quality of service including targeted recruitment, effective management of sick absence and deployment of a “nerve centre” to support most impacted units;
- Addressed letter volume more robust than expected, which combined with pricing actions led to stronger revenue performance, particularly in business mail. However, addressed letter volumes down 30% since pre pandemic, highlighting the need for Ofcom and Government to take urgent action to reform the Universal Service.
- Welcome result of CWU ballot on Business Recovery, Transformation and Growth Agreement: 76% yes vote on the highest ever turnout for a CWU consultative ballot (67%); planning commenced for further revisions to improve productivity and quality of service; progressing with trials to underpin indoor method changes programme; new attendance standards and sick pay arrangements from 1 August.
- GLS revenue growth 7.4% year on year in the first quarter, (4.3% in Euro terms, including acquisitions and working day negative impact of c. 1%); volume growth of 4%, slightly ahead of expectations, offsetting impact of lower fuel surcharges and weaker freight revenues; economic backdrop mixed across different markets; investing in automation and other productivity measures to mitigate expected margin pressures.
- Outlook: unchanged, still targeting Group adjusted operating profit in 2023-24 (before voluntary redundancy costs in Royal Mail).
