Royal Mail have published their full year results for 2019/20, with the coronavirus pandemic believed to have accelerated the trend of more parcels and fewer letters being sent, and a shift from business-to-business (B2B) to business-to-consumer (B2C) transactions.
High level summary of results:
- Pre-tax profit of £180m
- Overall revenue growth of 1.6%
- Parcel volumes increased by 2%
- Letters continued to decline by 8%
The impact of Covid-19 in the first two months of the current financial year (2020/21) meanwhile, has seen parcel volumes up 37% and letter volumes down 33%.
GLS, Royal Mail Group’s subsidiary logistics company, has seen 50% volume growth in B2C and 20% decline in B2B.
Royal Mail are currently pursuing a strategy to adapt the network for more parcels and fewer letters, acknowledging that they’ve been slow in the past to respond to changes in the market and customer behaviour, and now need to accelerate the pace of operational change.
Immediate changes will include capital expenditure reductions over two years, whilst long term sustainability will see further engagement with unions, increased employee engagement, and stakeholder engagement on the Universal Service to reflect customer needs.
Mark Siviter, Managing Director for Mails & Retail at Post Office, said: “Post Office has seen unprecedented parcel volumes during the pandemic. Our postmasters keeping the network open during these difficult times has been vital in helping us support this growth.
“We have been a critical channel for Royal Mail, SMEs and consumers and will continue to be even more important as we move into the next phase of life post-lockdown.”