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Summary
- Royal Mail’s revenue rose by 9.8 per cent to £5.67 billion in the first half of this year
- The company reported an operating loss of £20 million in the first half of this year due to the sharp rise in the coronavirus-related costs
- The company has recorded its first revenue growth since privatisation in 2013
UK’s postal service and courier firm Royal Mail Group Ltd has reported that the company’s revenue from parcel deliveries has surpassed its revenue from letters for the first time as digital shopping has increased in the wake of the pandemic.
The postal service group’s revenue from parcel deliveries now stands at 60 per cent of its total revenue, which increased by over 33 per cent in the first half of this financial year.
The revenue from the company’s postal service rose by 5 per cent YoY in the six months to 27 September, while the group’s overall revenue in the first half of this year increased by 9.8 per cent to £5.67 billion. This is significant as the company registered its first revenue growth since it was privatised in 2013.
The company reported an operating loss of £20 million in the first half of this year due to the sharp rise in the coronavirus-related costs of £85 million and from other business costs such as voluntary redundancy of £147 million and international conveyance of £32 million.
For the reported period, the company posted profits before tax of £17 million, down 90.2 per cent from a year ago. While the group’s GLS delivered robust revenue growth of 21.7 per cent with an adjusted operating margin increasing by 300 basis points.
In a press note, Keith Williams, the interim executive chair at Royal Mail, said the company has been constantly trying to transform its services and offer more innovative products and services to customers.
In terms of revenue, Williams said the company has done extremely well and have witnessed a strong growth for the first time since privatisation.
Talking about the future plans, William said that the firm needs to pace up its business model in order to turn profitable in Britain. He added that the group is planning to cut down the management layers in order to enhance the decision-making process.
Moreover, the company is also trying to focus its capex on those assignments and projects that can make the customer services more broad based and boost the overall company’s efficiency.
William added that these initiatives should boost the company’s growth and leads to a saving of about £330 million in operational costs.
Also read: Royal Mail Shares Get A Boost from Launch of Doorstep Parcel Pick-Up Services
Earlier in the first week of November, Royal Mail released an inflight delivery alternative to provide bigger and better services to receiving customers.
The share price of Royal Mail PLC (LON:RMG) was trading at GBX 295.20 at 8:06 AM GST on 20 November 2020, marginally lower from its previous closing.
