Royal Mail plc Full Year Results 2015-16 : Profits down Parcels up Letters down

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Royal Mail plc (RMG.L) today announced its results for the full year ended 27 March 2016

Moya Greene, Chief Executive Officer, commenting on the results said:

“We have delivered a resilient performance in challenging markets. Group revenue was up one per cent and our strategic focus on costs resulted in a one per cent decline in our UK underlying costs. We continue to invest in our transformation and initiatives to support growth.

“Our UK parcel revenue and volumes grew by one per cent and three per cent, respectively. Our addressed letter volumes declined by three per cent; total letter revenue by two per cent. GLS, our European parcel business, continued to perform strongly, supporting the overall Group revenue performance.

“We are introducing new and improved products and services and responding quickly to changing customer needs. These measures, alongside our emphasis on customer focus and delivering a value for money service, have helped us to maintain our pre-eminent position in UK letters and parcels and driven growth in GLS.”

Read More at the link

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This morning, we’ve announced our results for the full year ended 27 March 2016.

Money we earn as a Group was up 1%*
Money we earn from UKPIL was down 1%; money we earn from GLS was up 9%
UK parcel volumes grew 3%, the money we earn from UK parcels grew 1% in a competitive trading environment
Addressed letter volumes declined by 3%, better than our forecast range of 4-6% per annum in the medium term. This was due to the one-off benefit of the return of direct delivery volumes.

Our CEO Moya Greene said: ‘We have delivered a resilient performance in challenging markets… We are introducing new and improved products and services and responding quickly to changing customer needs.

‘These measures, alongside our emphasis on customer focus and delivering a value for money service, have helped us to maintain our pre-eminent position in UK letters and parcels and driven growth in GLS.’

Click here to read a Courier News Flash on today’s results. And tune into RMtv next week for a special programme with Moya Greene on our full year results.

* Movements in money we earn, costs and margin 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.

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Letters and parcels

UK parcel volumes grew 3%, driven by import parcels, Royal Mail account parcels, and Parcelforce Worldwide
Parcelforce Worldwide volumes grew 12% with new customer wins and increased business from existing customers
The money we earn from UK parcels grew 1% in a competitive trading environment
Addressed letter volumes declined 3%, better than our forecast range of 4-6% per annum in the medium-term. Due to the one-off benefit of the return of direct delivery volumes
The money we earned from total letters declined 2%.

Parcels market

We are the UK’s leading parcels carrier. We have put in a wide range of initiatives to maintain our pre‑eminent position in this segment.

Our European parcels carrier, GLS, performed very well with volumes up 10%. Money earned grew 9%, with growth in almost all markets.

Letters

In 2015-16, addressed letter volumes declined by 3%. The money we made from marketing mail was flat, reflecting a slowing in UK economic activity.

We are defending letters through initiatives like our MAILMEN campaign, which features 22 leading advertising executives.

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Royal Mail has reported a 33% fall in annual profits and warned that market conditions remain "challenging" despite rising parcel volumes.


It said pre-tax profits for the year to the end of March were £267m compared with £400m a year earlier.

Royal Mail chief executive Moya Greene said: "We have delivered a resilient performance in challenging markets."

UK revenue fell 1% to £7.6bn from £7.7bn a year earlier as letter volumes and revenue fell by 3% and 2%.

UK parcel volumes grew 3%, but revenue was only 1% higher.

Parcel volumes at Royal Mail's European division, GLS, grew 10% while revenues were up 9%.

That helped total group revenue rise 1% to £9.2bn in the year.

The company's preferred measure of profit - adjusted annual operating profits before transformation costs - rose 5% to £742m from £740m a year earlier.

Transformation costs included 3,500 voluntary redundancies, which cost the business £117m in the year. Overall transformation costs rose to £191m in the year.

Royal Mail said it reduced costs at its UK parcels division by 1%, while net debt fell to £224m.

It added the fall in annual pre-tax profits was the result of last year's results being boosted by the profit on the sale of its Paddington depot in west London.