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Business

Royal Mail parcel revenue surpasses letters in H1

Royal Mail has revealed revenue generated from parcels surpassed that of letters in the first half of the year – the first time this has happened in the organisation’s 500-year history.

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Parcels accounted for 60% of all revenue for Royal Mail in the first half

Total revenue for the six months to September 27th was £5.67bn, up 9.8% from £5.17bn in the previous year.

Revenue from the Royal Mail business unit increased by 4.9% year-on-year to £3.83bn and GLS revenue jumped 21.7% to £1.87bn, but Intragroup posted a £27.0m loss for the period.

Keith Williams, interim executive chair for Royal Mail, says the primary reason behind the growth in parcels revenue was due to an increase in online shopping in H1, as people were forced to stay at home during the first novel coronavirus (Covid-19) lockdown.

“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%,” Williams says.

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

“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.”

However, despite an increase in revenue, Royal Mail posted a £20.0m operating loss for the first half, while profit before tax fell 90.2% year-on-year to £17.0m.

Taking into account adjustment measures, including excluding pension charge to cash difference adjustment and specific items, operating profit was down 77.6% to £37.0m and profit before tax fell 87.7% to £18.0m.

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