Hermes UK revenues up by almost 70%, margins doubled.

In its latest years accounts, just filed with Companies House, Hermes UK reported profit before tax of £175.8 million, growing by 232% from 2020. This was on revenue growth of 68.6% to £1,449.9 million in the financial year ending 27 February 2021.
 
This growth, at a significantly higher rate than other carriers have reported, places Hermes fourth in the UK parcels market by revenue. Only Royal Mail, DPD UK and DHL’s combined operations are now higher, with DHL Parcel UK and DHL Express in combination having £1,655m and DPD UK £1.5bn in their most recent accounts – ahead of both UPS and FedEx’s UK operations.
 
Coping with this growth has required significant investment in the Hermes network and additional operating costs. For example, Hermes reports that it doubled the size of its courier network from 13,000 to 26,000 to handle the increased volumes. Nevertheless, operating margins have doubled, from 6.2% to 12.1%, putting Hermes at the top end of its peer group.
 
One factor which Hermes cites as having helped it to gain market share is the network of parcel lockers which it has from its relationship with InPost. The two companies have been in common ownership since 30th November 2020, when private equity investor Advent International acquired 75% of the shares of Hermes UK. We understand that Hermes now has exclusive access to InPost’s network.
 
Hermes cites the importance of its Self Employed Plus (SE+) courier programme as having been important in allowing it to scale up its courier force. This guarantees a minimum income and other benefits for its couriers. The programme has been developed in conjunction with the GMB union. Hermes also announced that the long-running HMRC investigation into its working practices and whether they represesnt genuine self-employment, has been concluded in its favour, removing a possible significant penalty and margin impact had things gone the other way.


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