TIDMRMG
RNS Number : 8987F
Royal Mail PLC
21 July 2021
Royal Mail plc
(Incorporated in England and Wales)
Company Number: 8680755
LSE Share Code: RMG
ISIN: GB00BDVZYZ77
LEI: 213800TCZZU84G8Z2M70
21 July 2021
AGM TRADING STATEMENT
Royal Mail plc (RMG.L) will hold its 2021 Annual General Meeting
(AGM) today at 11.00. In line with the update published yesterday,
in the interests of health and wellbeing the Board very strongly
requests that shareholders do not attend in person. Royal Mail plc
Chair, Keith Williams, Royal Mail Chief Executive Officer, Simon
Thompson and GLS Chief Executive Officer, Martin Seidenberg will
comment on the performance of the Group in 2020-21 and provide an
update on the Group's progress in the first quarter of 2021-22. The
results of voting at the AGM will be announced later today.
Trading update for the three months ended June 2021.
Given the unprecedented impact of the COVID-19 pandemic over
this last year, we are providing both one-year and two-year
comparisons for the first quarter. The two-year (pre-COVID)
comparisons may prove helpful in assessing underlying trends and
business performance.
Keith Williams, Chair, commented:
"The first quarter saw a strong revenue performance across the
Group, with both Royal Mail and GLS reporting higher revenues than
the prior year.
"For Royal Mail, as expected, parcel volumes decreased and
letter volumes increased compared to the exceptional period last
year encompassing the UK's first lockdown, when non-essential
retailers closed for the first time. We are starting to see
evidence that the domestic parcel market is re-basing to a higher
level than pre-pandemic, as consumers continue to shop online.
"For GLS, as expected, parcel volume growth continued albeit at
a slower rate, due to the exceptionally strong comparators from the
same period in 2020-21.
"As pandemic restrictions continue to ease there is still
uncertainty about levels of COVID transmission, the impact on
consumer behaviour and economic factors such as GDP growth and
inflation, all of which will impact on future performance. We
continue to expect fluctuations in volumes as we emerge from COVID
restrictions, which we will need to manage accordingly. Nonetheless
we are encouraged by the revenue performance across Royal Mail and
GLS in the first quarter, and notwithstanding the current
uncertainty, remain confident about the full year."
Group
-- Group revenue grew by 12.5% vs Q1 2020-21 and by 20.2% compared to Q1 2019-20;
-- Prospects for full year performance remain unchanged.
Royal Mail
-- Revenue: Increased 12.2% vs Q1 2020-21; Increased 13.4% vs Q1 2019-20;
-- Parcel volumes: Decreased 13% vs Q1 2020-21; Increased 19% vs Q1 2019-20;
-- Parcel revenue: Increased 3.4% vs Q1 2020-21; Increased 36.2% vs Q1 2019-20;
-- Addressed letter volumes (excluding elections): Increased 22%
vs Q1 2020-21; Decreased 18% vs Q1 2019-20;
-- Total letter revenue: Increased 25.7% vs Q1 2020-21; Decreased 6.6% vs Q1 2019-20.
GLS
-- Revenue: Increased 12.4% vs Q1 2020-21; Increased 36.6% vs Q1 2019-20;
-- Volume: Increased 10% vs Q1 2020-21; Increased 34% vs Q1 2019-20;
-- Reiterating full year GLS guidance: low single digit %
revenue growth and c. 8% operating margin.
Royal Mail
Royal Mail revenue in the first quarter increased by 12.2% year
on year, and 13.4% over two years. As previously stated, the
significant short-term uncertainty as we begin to unwind from the
impacts of the pandemic means we are not issuing guidance for
2021/22 at this stage.
The first quarter of last year included the UK's first lockdown
when all non-essential retail was closed and people were required
to stay at home. Consequently, total parcel volumes in the first
quarter this current financial year decreased compared to the same
period last year (-13%), with the rate of decline increasing across
the quarter as lockdown measures were eased. Total parcel revenues
increased (+3.4%) due to positive product mix.
The domestic parcel market remains strong. The early signs are
that domestic parcel volumes appear to be re-basing at a higher
level than pre-COVID as consumers continue to shop online. While
domestic parcel volumes decreased 7% year on year, they increased
by more than a third (+35%) compared to pre-COVID levels in
2019-20. International volumes were lower than the prior year,
continuing the trend seen in the second half of 2020-21, due to a
number of factors outlined previously including reduced air freight
capacity and increased conveyance costs, and the transition to a
new trade deal with the EU. As lockdown restrictions progressively
ease, we continue to expect month-on-month fluctuations in parcel
volumes. The future evolution of the pandemic, including levels of
COVID transmission, consumer behaviour and economic factors such as
GDP growth and inflation will impact on future performance.
Addressed letter volumes (excluding elections) increased, as did
total letter revenue, compared to the same period last year, when
the first lockdown meant that many businesses closed for the first
time. Overall the structural decline in letters continues, with
volumes down 18% compared to two years ago.
Royal Mail continues to make good progress on the delivery of
the CWU Pathway to Change agreement and the delivery of non-staff
cost savings of GBP110m are on track. We are also benefitting from
the recent introduction of new products and services to meet
changing customer demands, such as the roll out of parcel
deliveries on Sundays and the introduction of Parcel Collect, our
doorstep parcel collection service.
GLS
GLS delivered good volume and revenue growth in the quarter,
both year on year and vs. Q1 2019-20.
Volume growth in the first quarter was 10%, or 34% compared to
the first quarter of 2019-20. Volume growth slowed as a result of
lapping the strong volumes seen during the first COVID-19 lockdown
last year and the easing of restrictions in a number of countries.
We have seen the share of B2B increasing due to recovering B2B
volumes, combined with slowing B2C volume growth compared to last
year.
Revenue growth of 12.4% (15.6% growth in EUR) compared to
2020-21, or 36.6% (38.5% growth in EUR(1) ) compared to 2019-20,
was driven by volume growth but also benefitted from improved
prices and higher freight revenues, which were particularly
negatively impacted by the shutdown of retail during the first
COVID-19 lockdowns.
Revenue growth is expected to slow as the year progresses, due
to easing of lockdown restrictions across the GLS footprint and
stronger prior year comparators in the second half.
3 months ended June % change(4)
Volume (m) 2021 2020 2019 2021 vs. 2020 2021 vs 2019
------- -------------- -------------
Royal Mail
Total Parcels 371 427 310 (13)% 19%
------- ------- ------ -------------- -------------
Domestic
Parcels (ex.
international)(3) 326 352 242 (7)% 35%
------- ------- ------ -------------- -------------
Addressed
Letters (ex.
elections) 1,982 1,628 2,416 22% (18)%
------- ------- ------ -------------- -------------
GLS 216 195 160 10% 34%
------- ------- ------ -------------- -------------
3 months ended June % change(3)
Revenue (GBPm) 2021 2020 2019 2021 vs. 2021 vs. 2019
2020
------- --------- --------------
Group (2) 3,158 2,807 2,627 12.5% 20.2%
------- ------- ------ --------- --------------
Royal Mail 2,126 1,896 1,876 12.2% 13.4%
------- ------- ------ --------- --------------
Total Parcels 1,192 1,153 875 3.4% 36.2%
------- ------- ------ --------- --------------
Domestic
Parcels (ex.
international)(2) 979 918 668 6.6% 46.5%
------- ------- ------ --------- --------------
Letters 934 743 1,000 25.7% (6.6)%
------- ------- ------ --------- --------------
GLS 1,039 924 760 12.4% 36.6%
------- ------- ------ --------- --------------
1. Growth vs. Q1 2019-20 includes the benefit of the Mountain
Valley Express acquisition which added c. 2.0 percentage points to
the 2 year growth rate.
2. Royal Mail and GLS revenue does not add to Group revenue due
to the elimination of intragroup trading.
3. Domestic Parcels excludes Royal Mail and Parcelforce Worldwide import and export.
4. % changes based on reported numbers.
A further update on letter and parcel volumes for July and
August will be published on 23 September 2021. Interim results for
the 6 months to the end of September 2021 will be published on 18
November 2021.
Financial Calendar
Ex-dividend date* 29 July 2021
Dividend record date* 30 July 2021
Dividend payment date* 6 September 2021
July & August update 23 September 2021
2021-22 Interim Results 18 November 2021
* subject to approval at AGM.
Enquiries:
Investor Relations
John Crosse
Email: investorrelations@royalmail.com
Royal Mail investor relations line: 020 7449 8183
Media Relations
Helen Reynoldson
Phone: 07483 302245
Email: helen.reynoldson@royalmail.com
Jenny Hall
Phone: 07776 993 036
Email: jenny.hall@royalmail.com
Royal Mail press office: press.office@royalmail.com
Company Secretary
Mark Amsden
Email: cosec@royalmail.com
FORWARD-LOOKING STATEMENTS
This document contains certain forward-looking statements
concerning the Group's business, financial condition, results of
operations and certain Group's plans, objectives, assumptions,
projections, expectations or beliefs with respect to these items.
Forward-looking statements are sometimes, but not always,
identified by their use of a date in the future or such words as
'anticipates', 'aims', 'due', 'could', 'may', 'will', 'would',
'should', 'expects', 'believes', 'intends', 'plans', 'potential',
'targets', 'goal', 'forecasts' or 'estimates' or similar
expressions or negatives thereof.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors, which may cause the Group's actual
financial condition, performance and results to differ materially
from the plans, goals, objectives and expectations set out in the
forward-looking statements included in this document.
All written or verbal forward-looking statements, made in this
document or made subsequently, which are attributable to the Group
or any persons acting on its behalf are expressly qualified in
their entirety by the factors referred to above. Accordingly,
readers are cautioned not to place undue reliance on
forward-looking statements. No assurance can be given that the
forward-looking statements in this document will be realised;
actual events or results may differ materially as a result of risks
and uncertainties facing the Group. Subject to compliance with
applicable law and regulation, the Group does not intend to update
the forward-looking statements in this document to reflect events
or circumstances after the date of this document, and does not
undertake any obligation to do so.
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