Royal Mail PLC (LSE:RMG) is seeing financial tailwinds from the pandemic dissipating while facing increasing headwinds in the form of weak economic growth and rising costs.
In its results statement covering the 52 weeks to the end of March 2022, both the non-executive chair, Keith Williams, and the chief executive officer (CEO), Simon Thompson, emphasised the need for the letters and parcels delivery firm to kick on with its transformation, which is sure to be seen as a shot across the bows of the Communication Workers Union (CWU).
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Group revenue in the year just ended edged up to £12.71bn from £12.64bn the year before.
Royal Mail revenue was down 1.6% year-on-year reflecting changing consumer behaviour following the removal of lockdown restrictions and lower international volumes, partially offset by growth in test kits.
Revenue in the GLS overseas parcel delivery division rose 4.4% in sterling terms as business-to-business volumes recovered.
Profit before tax slipped 8.8% to £662mln from £726mln.
Net debt widened to £985mln from £457mln a year earlier.
The board is proposing a final dividend of 13.3p, making the full-year pay-out 20p.
Buried deep in the Royal Mail PLC (LSE:RMG) accounts is a liability listed as "stamps held ,not yet used by customers". The liability is for £299,000,000. So there are £299 million worth of unused stamps out there somewhere in the UK, many will soon be worthless after this year #royalmail
— Paul Dreczko #FBPE ???????? ???????????????? (@Paul_D1963) May 14, 2022
“We are at a crossroads with the transformation of Royal Mail. We need to adapt our business to a post-pandemic world and whilst we are making progress in some areas, more needs to be done in others. We need to accelerate and broaden the scope of change to meet the demands of our customers, deliver real efficiency savings with a financial benefit this year and beyond, and remain competitive to support sustainable growth and secure jobs for the future,” said Keith Williams, the chair of Royal Mail.
Simon Thompson, the CEO, said the need to transform the business had become more urgent.
“Our future is as a parcels business, so we need to adapt old ways of working designed for letters and do it much more quickly to a world increasingly dominated by parcels,” Thompson said.
1.91% (up from 1.81%) of Royal Mail PLC (LSE:RMG) (UK) is now shorted by BLACKROCK INVESTMENT MANAGEMENT (UK) LIMITED. More info on https://t.co/cr3RDKGUYv #royalmailplc $RMG
— Shortics.com (@Shortics_com) May 18, 2022