It was the usual story in Royal Mail Group’s (LON:RMG) trading update, with parcels revenue up, letter deliveries down, and cost-cutting to the fore.
The group said revenue in the first nine months of the financial year was unchanged year-on-year, in line with expectations.
The UK parcels, international and letters (UKPIL) unit’s revenue was down 2% on the corresponding period of the year before, with a 3% increase in parcel revenue failing to completely offset a 5% decline in revenue.
The figure for letter revenue excludes money earned from delivering political parties’ election literature.
The General Logistics Systems division saw revenue rise 9% on the back of an 8% increase in volumes, though performance compared to the previous year was helped by the timing of Easter.
“We are seeing the impact of overall business uncertainty in the UK on letter volumes. This impacted UKPIL revenue despite a solid performance from UK parcels against a highly competitive backdrop. GLS continues to perform well,” the group said.
Management continues to focus on cutting costs or what it calls “cost avoidance”.
The group said it remains on course to take around £225mln of costs out of the UKPIL business in the current financial year.
Management said it remains confident that its total net cash investment will be no more than £500mln this financial year and next.
"Our postmen and women delivered a great service at Christmas, even better than last year, with 138mln parcels handled in December alone. Our comprehensive planning, which started much earlier this year, enabled us to deliver this service for our customers right across the UK,” said Moya Greene, chief executive officer of Royal Mail.
Shares in Royal Mail were around 5% lower in early deals.