In a trading statement Royal Mail has said that parcel volumes were up 3% in the first nine months of the financial year though this was offset by a 5% drop in letter mail volumes.

According to the postal operator, UKPIL’s parcel volumes were up 2% with growth driven by Royal Mail account parcels. Parcelforce Worldwide saw volumes decline 1% and this reflects the very strong period before and increasingly competitive express parcels market.

Overall parcels revenues were up 3% with all the main channels returning revenue growth. The consumer channel delivered both revenue and parcel growth.

Addressed letter volumes fell by 6% (excluding political election mailings). Letters performance in the period before benefitted from the one off return of direct delivery volumes and good performance during the peak period. Q3 of 2015 was very strong.

GLS, Royal Mail’s international arm, saw an 8% rise in volumes and a 9% rise in revenues.

The postal operator said that performance in the period also benefitted from the timing of Easter as well as other public holidays across Europe that accounted for around 1% of volume and revenue movements.

Revenue growth was achieved in all key markets with the exception of Ireland, with continued strong growth in Italy.

The strength of the GLS performance offset a two per cent decline in UKPIL revenue.

Royal Mail has launched a cost avoidance programme and expects to deliver around £225m of UKPIL operating costs avoided in 2016-17.

“We continue to target a reduction of up to 1 per cent in underlying UKPIL operating costs before transformation costs in 2016-17. In addition, we remain confident that our total net cash investment will be no more than £500m this year and next.”
 
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