Royal Mail's owner, International Distributions Services PLC (LSE:IDS), saw its shares rally 2% today as it detailed the cost of industrial action on the business so far.
In a trading statement, the company said the net cost of strike action in the nine months to end-December 2022 was around £200mln, with an adjusted operating loss of £295mln.
IDS said it continues to expect an adjusted operating loss for Royal Mail around the mid-point of the existing £350mln to £450mln guidance range, due to tight control of costs and strike contingency measures.
But this assumed no more days lost to strike action.
Revenue was down 12.8% year on year in the nine-month period with the performance continuing to be driven by a return to structural decline in letters, weaker retail trends, the impact of industrial disruption (18 strike days year to date), and lower test kit volumes.
Total letter revenue declined 6.1% year on year and total parcel revenue reduced by 17.8% year on year, with volumes down 20%.
The company said it expects the number of voluntary redundancies required to achieve the required 10,000 job cuts by August 2023 to be “significantly lower” than the 5,000-6,000 communicated in October.
At its GLS business, IDS said volume declined 2% year on year in the nine months, while revenues grew 9.7% in sterling terms.
Adjusted operating margin for the nine months of 7.5% were 100 basis points below prior year.
For GLS, the company maintained guidance for revenue growth year on year of high single digit percent and tightened its guidance on adjusted operating profit to a range of €380mln to €400mln (previously €370mln to €410mln).