Royal Mail-owner International Distributions Services PLC (LSE:IDS) has appointed a new group chief executive and reported a 4% decline in UK revenue for the first quarter but roughly flat for the group.
Martin Seidenberg, who has been leading the group’s Amsterdam-based international parcel arm, GLS, for the past two years, will lead the IDS Group and set strategy and also appoint new CEOs for GLS and Royal Mail.
Before joining GLS, the native German worked at rival Deutsche Post DHL in various roles, including regional CEO.
IDS chairman Keith Williams highlighted his “extensive international logistics experience and proven track record”, including having “transformed GLS into a state-of-the-art international parcel logistics network”.
Following the pay deal agreed by Royal Mail with its major union, he said it is a “critical juncture” as the UK arm “[enters] a new phase of its transformation”, with planning underway for new attempts to improve productivity and service, and other new work conditions from 1 August.
As for the trading update, group revenues rose 0.3% in the three months to end-June as parcel volumes declined 10% at Royal Mail and grew 4% at GLS.
The falls in revenue at Royal Mail was “as expected”, the company said, and its focus is on improving quality of service, including “targeted recruitment, effective management of sick absence and deployment of a ‘nerve centre’ to support most impacted units”.
Letter volumes in the UK were more robust than expected, though with volumes down 30% since before the pandemic this highlighted "the need for Ofcom and government to take urgent action to reform the Universal Service”.
GLS revenue grew 7.4% as volume growth was slightly ahead of expectations, offsetting the impact of lower fuel surcharges and weaker freight revenues.
The outlook for the full year was unchanged, targeting an adjusted operating profit at group level before voluntary redundancy costs in Royal Mail.