17th May 2018 09:23
LONDON (Alliance News) - Royal Mail PLC said Thursday that despite a "challenging environment" the postal service's revenue reached a "significant milestone" in its recently completed financial year.
For the year ended March 25, Royal Mail said revenue increased 4.0% to GBP10.17 billion from GBP9.78 billion the year before. This was driven by parcel growth from its two core businesses, UKPIL and GLS.
Taking into account the differences in UK working days and foreign exchange movements the underlying increase was 2%, Royal Mail said.
However, the FTSE 100-listed company reported a declined in pretax profit to GBP212.0 million from GBP335.0 million the prior year.
Royal Mail increased its final dividend 16.3 pence, up from 15.6p a year before, making for a full-year dividend by 4.3% to 24.0 pence from 23.0 pence the year before.
UKPIL posted revenue of GBP7.62 billion, flat on the year before. But GLS, the company's European delivery network, increased its revenue 10% to GBP2.56 billion from GBP2.12 billion.
Parcel revenue in the UK grew 4%, as parcel volume increased 5% but total letter revenue decreased by 4% on a 5% decrease in addressed letter volumes.
Looking forward, Royal Mail expects parcel volume and growth to be the same for the 2019 full year. But expects addressed letter volumes to decrease 4% to 6%, and due to the general data protection regulation, believes it will be at the higher end of this range. If "business uncertainty" remains, however, it could fall outside guidance.
The postal service is targeting GBP230.0 million in cost avoidance from its UKPIL business. It is hoping to achieve this through better productivity.
Chief Executive Officer Moya Greene said: "It has been another successful year, despite the challenging environment. Group revenue is now over GBP10 billion, a significant milestone, thanks to our geographical diversification and focus on growth.
"GLS had another strong year. Its revenue grew organically and through targeted acquisitions in higher growth markets. Parcel volume growth in UKPIL was our best for four years. We delivered a resilient letters performance.
"We continue to focus on cost avoidance and parcel revenue growth in the UK and through GLS. The good cash generation characteristics of our business will support our progressive dividend policy."
Shares in Royal Mail were down 5.1% Thursday morning to 567.60 pence each.
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