Royal Mail has announced that revenues derived from parcels is now bigger than letters as it now accounts for 60% of revenue as revealed in its interims.
As part of its half year results ending 27 September 2020, Royal Mail reported a group revenue increase of 9.8% as a result of parcel growth within Royal Mail and GLS. It posted £5.67 bn of revenue for the half year 2020 compared to £5.16bn during the equivalent period in 2019.
As it posted an overall operating loss of £20m for the half year, GLS was again the star-performer with an operating profit of £166m (up 84.4%) as online shopping accelerated demand.
While parcel volume was up 31% overall, total letter volume was down 33%.
Commenting on the performance was interim executive chair Keith Williams who looked confident that Royal Mail will be able to turn things around:
“The level of revenue growth in the first half shows we have the right strategy and that Royal Mail can be cash generative and a sustainable, profitable business in the future. But we need to speed up the pace of change in order to create a profitable business in the UK. We are making good progress on the initiatives we set out in June. We are reducing management layers to increase our speed of decision making, directing the business towards those activities which generate quicker payback and focusing our capital expenditure on projects which will improve our customer proposition and increase our efficiency.
These initiatives should add to top line growth and generate a saving of around £330 million in operational costs.”