Royal Mail has reported its financial results for the year ending 27 March 2022. Group revenues increased 0.6% y-o-y to £12,712m. According to the company, Group revenue performance was driven by GLS.
Group adjusted operating profit also rose by 8% y-o-y to £758m, driven by improved profitability by Royal Mail.
Royal Mail revenue decreased by 1.6% y-o-y to £8,154m, reflecting changing consumer behaviour following the removal of lockdown restrictions and lower international volumes, which was partially offset by a growth in test kits. According to Royal Mail, testing kits accounted for around 7.0% of total parcel volumes for 2021-2022.
Adjusted operating profit rose by 20.9% however, to £416m; according to Royal Mail, this was due to the benefits of restructuring and non-people cost saving programmes.
Domestic parcel volume (excluding international) grew by 31% vs. pre-pandemic period (2019-20), and were down 7% y-o-y due to normalisation post lockdown restrictions. Addressed letters (excluding elections) volume grew 3% y-o-y following sharp declines last year; volumes were however down 18% vs. 2019-2020.
GLS revenues increased by 4% y-o-y to £4,129m, driven by a recovery in B2B volumes and freight. GLS saw a continued parcel volume growth of 4% y-o-y, driven by both domestic and international volumes, with a recovery in B2B volumes. Operating profit did however decrease 4.5% y-o-y, to £342m.
Non-executive chair Keith Williams commented: “Whilst a difficult environment persisted over the last year, with operational challenges caused by Omicron and tight labour markets, we continued to see financial tailwinds from the pandemic, which are now dissipating. We also have clear headwinds as we enter 2022-23, such as weakening GDP and growing inflationary pressures. Whilst both GLS and Royal Mail face short term challenges, they also have longer term opportunities.”
He continued: “We are at a crossroads with the transformation of Royal Mail. We need to adapt our business to a post pandemic world and whilst we are making progress in some areas, more needs to be done in others. We need to accelerate and broaden the scope of change to meet the demands of our customers, deliver real efficiency savings with a financial benefit this year and beyond, and remain competitive to support sustainable growth and secure jobs for the future. In GLS, we made good progress on our Accelerate strategy and we need to continue to harness growth opportunities in a profitable way. We are making good progress in France and Canada but seeing margin pressure in the US. We are taking actions to address short term challenges, including price increases and accelerating efficiency opportunities, while still investing for the future. GLS can leverage its business model to become more global, digital, and diverse.”
Source: Royal Mail