The Company and its subsidiaries, UK Mail Limited and UK Pallets Limited are engaged in the provision of express collection and delivery services for parcels, mail and palletized goods.
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Same day delivery is a premium segment of the parcels market, with an estimated value of over £500 million, and growing rapidly at around 4-5% per year. The company in May estimated transformation costs of around GBP120 million to GBP140 million a year. Given our strategic focus on costs, we now expect underlying UKPIL operating costs to be down by at least one per cent for the full year.
The rise in the number of parcels came as a result of gaining new customers, Royal Mail said.
However, interim dividend per share increased to 7p, from 6.7p a year ago.
Royal Mail chief executive Moya Greene said: “We have delivered a resilient performance in the first half, demonstrating our ability to respond to a competitive trading environment”. Letter volumes were down 4.0%, at the low end of the group’s forecast decline.
She added that full-year results will be highly dependent on its “important Christmas period, for which we have extensive preparations in place”.
Royal Mail has agreed to acquire eCourier, a same day delivery company operating mainly in the Greater London area and offering nationwide distribution.
Parcel volumes rose 4 percent in the United Kingdom, with revenue up 1 percent, while GLS, which operates across Europe, boosted volumes 9 percent and sales 8 percent.
Royal Mail have said that the “financial terms of the transaction are not material in the context of the Royal Mail Group as a whole”. However, UK Mail needs to optimise the scheduling of parcels into the sorting centre throughout the day, to achieve a more even spread.
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Its privatisation completed in October, in total raising £3.3 billion from the sale for the Government, with proceeds used to pay down the national debt.
