Royal Mail boosted by general election mail and stamp price hikes
- IDS urging shareholders to accept the offer to be bought by Czech billionaire
Royal Mail revenues were bolstered by general election-related mail and stamp price hikes, making up for fewer letters deliveries in recent months.
Parent company International Distribution Services (IDS) made £2billion in revenues in the three months to June, up from £1.8billion a year earlier.
IDS on Thursday also urged shareholders to vote in favour of the offer to be bought by Czech tycoon Daniel Kretinsky in a multi-billion-pound deal.
Boost: Royal Mail has seen its sales bolstered by general election mail and stamp price hikes
The number of total parcels delivered increased by 11 per cent to £315million year-on-year.
But Royal Mail saw the volume of addressed letters – which excludes election mail – fall by 4 per cent compared with the previous year.
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Total revenues from letters rose by 11 per cent, driven by millions of poll cards, postal votes and candidate mail during the general election campaign.
IDS said the jump was also driven by price hikes, 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 per cent to £3.3billion over the latest quarter.
IDS said it was 'unanimously recommending shareholders accept the offer' from Mr Kretinsky’s EP Group, after agreeing to a £3.6billion 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.
Royal Mail, whose iconic red post boxes with the Royal Crest dot the country, is clawing back market share after struggling with labour strikes, competition and higher costs. It has called on regulator Ofcom to speed up reforms to the universal postal service.
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.
He added: '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.'
IDS shares edged up 0.2p to 336.20p on Thursday, having risen over 28 per cent in the last year.
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