Royal Mail boosted by election postal votes and stamp price hikes
Royal Mail’s parent company also said it was urging shareholders to accept the offer to be bought by Czech billionaire Daniel Kretinsky.
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Your support makes all the difference.Royal Mail has seen its sales bolstered by General Election mail and stamp price hikes, despite delivering fewer letters in recent months, its parent company revealed.
International Distribution Services (IDS) also said it was urging shareholders to accept the offer to be bought by Czech billionaire Daniel Kretinsky.
The British postal company made £2 billion in revenues in the three months to June, up from £1.8 billion a year earlier.
The number of total parcels delivered jumped by 11% to 315 million year-on-year.
However, it saw the volume of addressed letters – which excludes election mail – decline by 4% compared with the year prior.
But total revenues from letters increased by 11%, driven by millions of poll cards, postal votes and candidate mail during the UK General Election campaign.
IDS said the jump was also driven by price increases, with the cost of some first and second-class stamps going up in April.
Across the group – which also includes European parcel firm GLS – revenues increased by 8% to £3.3 billion over the latest quarter.
Whilst we are making good progress on our transformation in Royal Mail, we can't do it all on our own and we urgently need to see regulatory reform of the Universal Service
Meanwhile, IDS said it was “unanimously recommending shareholders accept the offer” from Mr Kretinsky’s EP Group, after agreeing to a £3.6 billion takeover deal in May.
On Wednesday, Mr Kretinsky vowed to maintain the service’s requirement to deliver letters six days a week throughout the UK, known as its Universal Service Obligation.
But Martin Seidenberg, IDS’s chief executive, doubled down on the group’s calls to reform the service requirement as letters continue to dwindle.
“Whilst we are making good progress on our transformation in Royal Mail, we can’t do it all on our own and we urgently need to see regulatory reform of the Universal Service,” he said.
“Letter volumes have declined from 20 billion at their peak to just 6.7 billion now, making the one-price-goes-anywhere Universal Service unsustainable in its current form.
“Ofcom is due to provide an update on Universal Service reform this summer.
“We urge Ofcom to move quickly to consult on the changes needed to ensure an efficient, financially sustainable Universal Service that protects what customers value the most.”