In line with our plan, we're on track to return to profit this year.
Thanks to all your hard work, we have delivered an improved financial and operational performance and are on track to return to adjusted operating profit in the full year, in line with our plan.
- Adjusted operating loss was reduced to £67 million compared to a £319 million loss this time last year – a significant improvement
- Revenue increased by 10.7% year on year
- Domestic parcel volumes were up 5% with parcel revenue up by 8.9%
- Letter volumes (excluding elections) were down 5%, but as a result of the General Election and price increases, letter revenues were up by 12.7%.
- Deployed Network Window, the biggest operational change for over 20 years, removing half our domestic flights, improving reliability and increasing our network capacity
- Increased parcel automation to 84% at the end of September and expected to reach 90% by March 2025 with continued investment across our network
- Innovated to improve visibility and efficiency through our network by digitally tagging yorks
- Expanded our out-of-home footprint and plan to increase further to 21,000 drop-off locations by the end of the financial year including the launch of our own Royal Mail lockers in the second half
- And we also played our part delivering democracy with the General Election in July, with more postal votes and candidate mail than ever before.
We’ve come a long way, but there is much more to do
We have come a long way and quality of service has improved over the past 12 months. But there is clearly much more we need to do with more investment and change needed across our network to make us more efficient, reliable and truly competitive.
We are delivering on the changes we can control but the cost environment is worsening at the time when we need to invest. As a major employer with 130,000 permanent employees, the upcoming change to employer National Insurance contributions will cost us around £120 million a year.
We all need to play our part in controlling what we spend and with this unexpected additional cost coming our way, reform of the Universal Service next year becomes even more urgent.
The good news is we have a strong plan and we are well prepared to deliver Christmas, with around 4,000 new vehicles being delivered before peak and 16,000 extra people to help us through the festive period.
International Distribution Services (IDS) results
At a Group level, IDS delivered a good performance in the first half of the year despite a difficult market backdrop. Revenue grew by 8.2% and we returned to an adjusted operating profit of £61 million, from a loss of £169 million this time last year. This was mainly driven by a significant reduction in the losses at Royal Mail.
Thank you for all you have done over the first half of the year and all you will do to help us get back to profitability in the second half. As we gear up for our busiest period of the year, let’s make this the best Christmas yet.
