TIDMRMG
RNS Number : 8121C
Royal Mail PLC
22 January 2015
Royal Mail plc
News Release
22 January 2015
ROYAL MAIL plc
TRADING UPDATE FOR THE NINE MONTHS ENDED 28 DECEMBER 2014
Royal Mail plc (RMG.L) today issued the following trading update
covering the nine months ended 28 December 2014.
Moya Greene, Chief Executive Officer, Royal Mail plc, said:
"Our postmen and women delivered a great service over the busy
festive period. Royal Mail delivered one of its highest ever
quality of service performances for parcel delivery to our
customers over the month. This is because 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.
"As the UK's biggest parcels carrier we are proud that so many
people and businesses the length and breadth of the country trusted
us to deliver their Christmas. We handled around 120m parcels in
the month of December alone, 4% more than last year. Letters
performed in line with our expectations, with addressed letter
volumes down 3% in the first nine months. GLS, our ground-based
European parcels business, continued to perform well.
"We are continuing to bear down on costs and expect that
underlying operating costs before transformation costs in UKPIL
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."
Trading performance for the nine months ended 28 December
2014
Group Change(1)
Revenue 1%
UKPIL Change(1)
Revenue flat
Underlying operating costs flat
-- UKPIL revenue was flat in the first nine months, with parcel and letter revenues now both flat year-on-year.
-- We delivered a strong cost performance and continue to expect
to hold underlying operating costs before transformation costs in
UKPIL flat for the full year.
UK Parcels Change(1)
Volumes 3%
Revenue flat
-- Parcel volumes were up 3% in the first nine months, compared
with 2% in the first half, supported by growth in import parcels.
In account parcels, we have benefitted from the initiatives we
introduced earlier in the year, successfully targeting new sectors
of the market and benefitting from opening our network at the
weekend.
-- Parcel volumes in the month of December alone were around 120m, 4% more than last year.
-- Parcel revenue performance has improved relative to the first
half, which saw a 1% decline. There continues to be a highly
competitive environment in all the major channels.
-- Parcelforce Worldwide volumes were up 10%. Pricing continues
to be under pressure due to the competitive environment in the
express delivery parcel market.
UK Letters Change(1)
Addressed letter volumes (3%)
Revenue flat
-- Addressed letter volumes decreased by 3% (excluding the
impact of election mailings), better than our forecast range of a
4%-6% decline per annum, mainly due to the improvement in UK
economic conditions this year.
-- Letter revenue was flat, compared with up 1% in the first
half, partially reflecting the diminishing impact of election
mailings over the year.
GLS Change(1)
Volumes 8%
Revenue 8%
-- GLS performed well, continuing the trend seen in the first
half. This reflects the attractiveness of our high quality deferred
parcels offering.
-- The change to the minimum wage came into effect in Germany at
the start of 2015. It is too early at this stage to be able to
determine the impact of this change on the German parcels industry
but the impact on GLS Germany's cost base could be significant.
Current trading and outlook
The sale of our Paddington site completed as expected on 8
December 2014 with total gross cash proceeds of GBP111m being
received.
Overall, trading in the nine months ended 28 December 2014 has
been in line with our expectations, with the seasonal increase in
parcel volumes coming through as anticipated. Given our performance
over the Christmas period, and that we continue to expect to hold
underlying UKPIL operating costs before transformation costs flat
for the full year, we are confident that the outcome for the full
year will be in line with our expectations. Our outlook for letter
and parcel trends and other guidance remain unchanged from that set
out in our Financial Report for the half year ended 28 September
2014 issued on 19 November 2014.
The results for the full year ending 29 March 2015 are expected
to be announced on Thursday 21 May 2015.
Note:
1. Movements in volume, revenue and costs are on an underlying
basis, unless otherwise stated. Underlying movements are calculated
after adjusting for foreign exchange movements in GLS' revenue and
working days in UKPIL revenue, as well as any non-recurring or
distorting items that have impacted the reporting periods. For
comparison purposes all underlying adjustments are made to the
prior period. For volumes, underlying movements are adjusted for
working days in UKPIL. There was approximately one less working day
in the first nine months of 2014-15 compared with the first nine
months last year.
Enquiries:
Investor Relations
Catherine Nash
Phone: 020 7449 8297
Email: investorrelations@royalmail.com
Media Relations
Mish Tullar
Phone: 07423 524 154
Email: mish.tullar@royalmail.com
Neil McCrae
Phone: 07776 995738
Email: neil.mccrae@royalmail.com
Royal Mail press office out of hours: 020 3338 1007
Disclaimer:
Figures presented in this trading update are not audited. This
trading update contains certain statements that constitute
"forward-looking statements". Such forward-looking statements
involve known and unknown risks, uncertainties and other factors,
which may cause the actual results, performance or achievements of
the Group or industry results to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking statements. Persons receiving this release
should not place undue reliance on any forward-looking
statements.
The Group disclaims any obligation or undertaking to update or
revise any forward-looking statements contained in this document to
reflect any change in its expectations or any change in events,
conditions or circumstances on which such statements are based
unless required to do so by applicable law, the Prospectus Rules,
the Listing Rules or the Disclosure and Transparency Rules of the
Financial Conduct Authority.
About Royal Mail plc:
Royal Mail plc is the parent company of Royal Mail Group
Limited, the leading provider of postal and delivery services in
the UK and the UK's designated universal postal service provider.
UK Parcels, International & Letters (UKPIL) comprises the
company's UK and international parcels and letters delivery
businesses operating under the "Royal Mail" and "Parcelforce
Worldwide" brands. Through the Royal Mail Core Network, the company
delivers a one-price-goes-anywhere service on a range of parcels
and letters products. Royal Mail has the capability to deliver to
more than 29 million addresses in the UK, six days a week
(excluding UK public holidays). Parcelforce Worldwide operates a
separate UK network which collects and delivers express parcels.
Royal Mail also owns General Logistics Systems (GLS) which operates
one of the largest ground-based, deferred parcel delivery networks
in Europe.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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