https://www.myroyalmail.com/news/2018/1 ... ts-2018-19
:-Disappointed with our performance; taking action to address it
We have announced our results for the six months ended 23 September 2018. Here are the headlines:
Money we earn as a Group up 1%*
Parcel growth more than offset letters decline
Money we earn in the UK down 1%*
Money we earn from GLS up 9%*
Group profit down 25%**, primarily reflecting lower revenue, poor productivity performance and, consequently, lower cost avoidance in the UK, as well as higher than expected cost pressures in GLS.Click here
to read a Colleague Update on today’s results. Don't forget to watch next week's RMtv Special on our financial results.https://www.myroyalmail.com/news/2018/11/uk-business
:-UK parcels doing well; UK productivity performance well below plan
Money we earn in the UK down 1%*
UK productivity performance significantly below plan at -0.2%
UK profit of £165m, down 29%**
We are implementing short-term cost actions, including a review of our organisational structure and management roles, discretionary spend and central costs.
UK parcels performed well
UK parcel volumes were up 6%* and the money we earn from UK parcels was also up 6%*.
Growth was driven by new business wins and more traffic with existing customers in domestic parcels:
Tracked 24/48 and Tracked Returns, our key e-commerce products, grew by 25 per cent
Amazon parcel traffic grew strongly due to higher volumes of letterboxable items
Extension of customer Latest Acceptance Times for our Tracked 24 product has already won new business.
Letters market is challenging
Addressed letter volumes (excluding election mailings) were down 7%* and the money we earn from total letters was also down 7%*. We maintain our outlook of a 4-6% annual decline in addressed letter volumes (excluding election mailings) over the medium term.
E-substitution, business uncertainty and new data protection regulations, known as GDPR, continue to impact letter volumes. We are continuing to increase the efficiency of our letters operation and maximise the value of letters for our customers and our business.*Movements in money we earn, costs, profit, margin and volumes are shown on an underlying basis unless otherwise stated. ‘Underlying’ means we have adjusted for certain items to make the results easier to compare and understand.
**Adjusted operating profit before transformation costs, on an underlying basis.
:-Our expectations for our full year results
In our trading update on 1 October, we announced that UK productivity was significantly below plan. We therefore lowered our 2018-19 cost avoidance target to £100m. We also lowered our expected profit for the year.
Our revised outlook and other guidance for the full 2018-19 financial year is unchanged.
We expect our Group adjusted operating profit before transformation costs to be £500m to £550m on a 52-week basis.
We expect the decline in addressed letter volumes (excluding election mailings) to be similar to the first half of the year.
We are committed to our revised cost avoidance target of £100m.
We expect our UK parcel volumes and revenue growth rates to be better than in 2017-18.
We are currently taking a clear look at our strategy and direction for the next five years. We will share an update with colleagues and investors in March 2019.