Royal Mail plc results for the full year ended 27 March 2022

Royal Mail: Domestic parcel volume (ex. international) up 31% vs. pre-pandemic period (2019-20); and down 7% year-on-year due to normalisation post lockdown restrictions. Test kits accounted for c.7% of total parcel volume in 2021-22.

Keith Williams, Non-Executive Chair, commented:

“Whilst a difficult environment persisted over the last year, with operational challenges caused by Omicron and tight labour markets, we continued to see financial tailwinds from the pandemic, which are now dissipating. We also have clear headwinds as we enter 2022-23, such as weakening GDP and growing inflationary pressures. Whilst both GLS and Royal Mail face short term challenges, they also have longer term opportunities.

We are at a crossroads with the transformation of Royal Mail. We need to adapt our business to a post pandemic world and whilst we are making progress in some areas, more needs to be done in others. We need to accelerate and broaden the scope of change to meet the demands of our customers, deliver real efficiency savings with a financial benefit this year and beyond, and remain competitive to support sustainable growth and secure jobs for the future.

In GLS, we made good progress on our Accelerate strategy and we need to continue to harness growth opportunities in a profitable way. We are making good progress in France and Canada, but seeing margin pressure in the US. We are taking actions to address short term challenges, including price increases and accelerating efficiency opportunities, while still investing for the future. GLS can leverage its business model to become more global, digital and diverse.”

Simon Thompson, Chief Executive, Royal Mail said:

“It has been a year of progress, but there is much more to do. Over 50% of parcels are now processed automatically, the delivery of two new parcel hubs are on track, and we are reinventing our services and digital experiences to make sending and receiving even easier in an online age.

“But as we emerge from the pandemic, the need to accelerate the transformation of our business – particularly in delivery – has become more urgent. Our future is as a parcels business, so we need to adapt old ways of working designed for letters and do it much more quickly to a world increasingly dominated by parcels.

“The last two years has shown us all how quickly customer needs can change. Our focus now is to work at pace with our people and our trade unions to reinvent this British icon for the next generations, so that we can give our customers what they want, grow our business sustainably and deliver long-term job security for our great team. We have no time to waste.”

Martin Seidenberg, Chief Executive, GLS added:

“We delivered a good set of financial results and have made good progress executing our strategy over the past 12 months, despite the challenging market conditions. We further strengthened our international capabilities and invested in our networks and services to unlock further growth and maintain our high quality levels.

Whilst the war in Ukraine has brought about some short term uncertainty, we will continue to leverage our business model and logistics know-how to become more global, digital and diversified.”

Source: Royal Mail Group

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