Brexit referendum mailshots help Royal Mail deliver goods

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Brexit might have battered the pound and sent stock markets reeling but the EU referendum delivered a boost to Royal Mail, the firm has said.

Political parties bombarding Britons with campaigning pamphlets meant fuller sacks for its posties, albeit not enough to reverse an overall slip in its UK revenues, which fell 1% in the three months to July.

Now Royal Mail is watching out for any Brexit hangover, as the former state-owned postal monopoly sees parcel and post volumes fall when the economy falters.

The company, led by Canadian chief executive Moya Greene, said it is “monitoring the situation” as “movements in GDP are drivers for letter and business-to-business parcel volumes”.

Revenue at Royal Mail’s main UK letters and parcels business slid as letter revenues were down 3%, although more online shopping meant parcels takings were up 2%.

The letter revenues were padded by the referendum boost: without it, UK addressed letter volumes would have declined by around 4%.

Greene pointed out that it was “traditionally a quieter trading period for the business”, which makes most of its money at Christmas, and “we saw no material change in overall trends”.

A busy three months at Royal Mail’s European parcels business, GLS, also helped overall group revenue inch up 1%.

But analyst Nicholas Hyett at Hargreaves Lansdown, a major player in Royal Mail’s 2014 privatisation, said: “despite EU referendum campaign mailings giving Royal Mail a boost… the UK business remains sluggish.

“UK parcels was supposed to be the growth engine for Royal Mail, with the UK letters business in decline. So it is somewhat concerning that conditions in the UK parcel market look set to remain challenging.”

Royal Mail escaped a potentially damaging regulatory move in May, when Ofcom decided against imposing strict price controls, despite the withdrawal of rival Whistl from door-to-door post delivery, leaving it the sole operator.