Services: Parcel revenues deliver boost for Royal Mail

Friday, January 24, 2014
10:35 AM

Royal Mail handled 115million parcels in December as the newly-privatised delivery firm continued to reap the benefit of the online shopping boom.

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The company’s seasonal workload, which saw a peak of 10m parcels on its busiest day, also included a rise in stamped mail volumes as Britons remained loyal to Christmas cards for passing on festive good wishes.

Letter volumes were also boosted by the high level of mailings from energy companies following a round of price rises in the sector.

Parcel revenues were up 8% on a like-for-like basis in the nine months to December 29 after the company moved to price deliveries by size rather than weight. This meant parcel volumes were flat as a result of the loss of some large uneconomic items in the wake of the price change.

Royal Mail’s parcels division now accounts for more than half of group revenues, with the company claiming it handled significantly more parcels than any other carrier in the UK market.

Revenues from UK letters were down by 3% on a like-for-like basis in the nine-month period, although Royal Mail said this was better than the rate of 4% lower seen in the first six months of the period.

Chief executive Moya Greene said: “Our postmen and women have again delivered Christmas for the UK. We were delighted to see that people continue to send seasonal good wishes, with Christmas cards underpinning a like-for-like increase in our December stamped mail volumes.”

Royal Mail shares were flat at 588p in the wake of today’s update, having jumped from their flotation price of 330p in October.

Confidence has been boosted by a deal between the company and union leaders on pay, pensions and other issues linked to the privatisation of the postal group.

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