Ahead of its 2021 Annual General Meeting, Royal Mail has released its results Q1-21. Royal Mail reported that its full-year performance prospects remain unchanged with the group’s revenue growing by 12.5% year-on-year, rising to £3.2bn in the first quarter of the 2021-22 financial year. The company are not issuing guidance for 2021-22 due to short-term uncertainty arising from the impact of the pandemic.
Royal Mail
Parcel volumes were up 19% from Q1-19 but down 13% from Q1-20 when non-essential retail was shut and people were required to stay at home as part of the UK’s first lockdown. While domestic parcel volumes decreased 7% year on year, they increased by 35% compared to pre-COVID levels in 2019-20. International volumes were lower than the prior year, continuing a trend seen in the second half of 2020-21, due to a number of factors including reduced air freight capacity and increased conveyance costs, and the transition to a new trade deal with the EU.
Addressed letter volumes (excluding elections) increased, as did total letter revenue, compared to the same period last year, when the first lockdown meant that many businesses closed for the first time. Overall the structural decline in letters continues, with volumes down 18% compared to two years ago.
Royal Mail state it is benefitting from the recent introduction of new services such as the rollout of parcel deliveries on Sundays and Parcel Collect, its doorstep parcel collection service.
GLS
Volume growth for GLS in the first quarter was 10% year-on-year, or 34% compared to the first quarter of 2019, the year before last. Revenue was up by a similar 12.4% compared to the same period in 2020 and up 36.6% compared to 2019. Volume growth slowed as a result of lapping the strong volumes seen during the first COVID-19 lockdown last year and the easing of restrictions in a number of countries.
The share of business-to-business has been increasing due to recovering volumes, combined with slowing business-to-customer volume growth compared to last year. Revenue growth is expected to slow as the year progresses, due to the easing of lockdown restrictions across the GLS footprint and stronger prior year comparators in the second half.
Royal Mail Chair, Keith Williams, said, “The first quarter saw a strong revenue performance across the Group, with both Royal Mail and GLS reporting higher revenues than the prior year.
“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.
“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.”
Source: Royal Mail
