Royal Mail have reported a drop in nine-month revenue with weaker than expected performance in its letters business.
Letter volumes fell by 8% with revenue from letter delivery falling by 6%, offsetting a 6% rise in parcel revenue. Royal Mail said the fall in addressed letter volumes reflects the continuing impact of General Data Protection Regulation (GDPR).
Despite strong growth from its parcels operations, for the nine months to December 23, revenue for the UK Parcels, International & Letters business fell 1% on an underlying basis.
Royal Mail confirmed it expects full-year operating profit before transformation costs of between £500m and £530m compared with £694m last year.
Hargreaves Lansdown analyst Nick Hyett said. “The continuing collapse in letter volumes is the big news in these numbers. Royal Mail’s gone out of its way to say that’s down to wider uncertainty, and the introduction of new privacy laws under GDPR, rather an uptick in companies using email rather than paper. Whatever the cause, we suspect those mailings are gone for good.”
Summary of Royal Mail Operating Performance
|Addressed letter volumes||(8%)|