Royal Mail Group has reported its financial results for the first six months of 2020, ending September 27, 2020. Group revenues increased 9.8% year-on-year to £5,671m, driven primarily by strong parcel growth at both Royal Mail and GLS. Adjusted operating profit was £37m, down 77.6% year-on-year.
The Group’s Royal Mail (UKPIL) business division’s total revenues were up 4.9% year-on-year to £3,828m. Parcel revenue grew by 33.2% in comparison to the same period in 2019. Total parcel volumes were also up 31% year-on-year. The increase in parcel volumes was driven by an increase in e-commerce activity as customers shopped more online as a result of COVID-19 restrictions. Domestic account parcel volumes, excluding Amazon, were up 51% and Royal Mail Tracked 24/48 and Tracked Returns performed strongly with 72% growth year on year. Meanwhile, total revenue was down 20.5% year-on-year primarily due to COVID-19 and the associated economic impact and ongoing business uncertainty.
In the GLS business division, total revenues increased by 21.7% year-on-year to £1,870m. Growth was primarily driven by growth in B2C and international volumes, particularly in markets with a higher B2C exposure such as Spain and Eastern Europe.
Adjusted operating profit was up 83.2% year-on-year to £185m. Adjusted operating profit margin of 8.9% was up 300 basis points compared with the same period in 2019, benefitting from one-off leverage benefit of around £36m.
“The growth in online shopping and parcels during the pandemic, combined with our increased focus on delivering more of what customers want, has led to revenue growth of nearly 10% for the Group in the first half, with Royal Mail revenue up nearly 5%. For the first time, parcels revenue at Royal Mail is now larger than letters revenue, representing 60% of total revenue, compared with 47% in the prior period. GLS delivered strong revenue growth of 21.7%, with adjusted operating margin up by 300 basis points. B2C accounted for 56% of GLS volume in the first half. Across the Group, our people have worked incredibly hard to keep delivering for our customers during these unprecedented times, and I want to thank them for their dedication and commitment,” said Keith Williams, Interim Executive Chair.
Source: Royal Mail
