Royal Mail saw parcel volumes increase by 21% and revenues by 14% in the third quarter of 2023, with the operator achieving its best Christmas operational performance in four years.
According to the latest trading update from parent company International Distribution Services (IDS), group profits were up 9.8% on the previous year. Letter volume decline returned to the long-established pattern of 6-8% annually, with letter revenues increasing by 11.8%.
However, increased costs, including pay increases and inflationary pressures, mean second-half operating profit is expected to broadly offset the £169m (US$214m) operating loss in the first half, so a breakeven result is expected.
Martin Seidenberg, chief executive officer of IDS, said, “I would like to thank all my colleagues across Royal Mail and GLS for their extraordinary efforts delivering Christmas for our customers. This has led to a marked improvement in both trading and operational performance for Royal Mail over Christmas and we have continued to win back customers. We need to build on this momentum.
“With Ofcom due to publish options for the future of the Universal Service imminently, now is the time for urgent action. We are doing all we can to transform, but it is simply not sustainable to maintain a delivery network built for 20 billion letters when we are now only delivering seven billion.”
To read the full trading update, click here.