Royal Mail buoyant after flat financial results

Management of Royal Mail seem happy at the flat financial half year results. On revenues of £4.395 billion – slightly down from last year’s £4.478 billion – profits were slightly down at £342 million as against £348 million last year. This differs markedly from key competitors in the field who have seen disappointing results and major falls in operating revenues.

Parcel volumes increased by 4% and profits on parcels increased by 1%, while letter volumes fell by 4% excluding the elections. Royal Mail’s forecast at the beginning of the year was of a 4-6% decline of addressed letters. One of the big campaigns Royal Mail has run was the benefits of direct mailings from businesses which has proven success with consumers, and this seems to have has a positive effect.

Royal Mail is investing heavily in e-commerce both online and at the delivery end of the spectrum. Yesterday, Apex Insight reported how it had acquired a same day delivery company in London to help shore up its same day delivery business in the Capital. The mail operator has also seen one of its acquisitions do extremely well. European parcel delivery provider GLS saw increases of 9% in parcel volumes and 9% in revenues over the last year.

The mail operator has taken a hit with Amazon rolling out its in house delivery network, where this once used to be a major contributor to Royal Mail’s revenues this is in decline. The mail and parcel operator has however offset this by offering a Local Collect service at a number of its Post Offices that again taps into the Amazon and wider e-commerce market.

Where UK Mail reported a fall in profits of around 80% year on year, Royal Mail’s news really isn’t much to worry about given the massive change in the industry.