On Thursday, Royal Mail Group (LSE: RMG) posted a trading update covering the five months to August 2021. Comparisons to last year, in the depths of the pandemic crisis, are perhaps not too useful. But volumes and revenues are nicely ahead of pre-pandemic 2019 levels.
Chair Keith Williams said: “In Royal Mail, we are increasingly confident that domestic parcels are re-basing at a significantly higher level than pre-COVID and believe we are maintaining our share of the market.”
Total revenue grew by 8.2% over the equivalent period last year, and by 17.7% compared to 2019. Domestic parcels volume did drop compared to a year ago, by 5%. But we were in the thick of lockdowns back then, with ordering things by post pretty much the only option. Still, domestic parcels revenue did actually rise by 4.1%.
And compared to the same five months in 2019, domestic parcels volumes rose by an impressive 34%, with revenue up 44.5%. Addressed letter volumes fell by 19% over two years (excluding election mail). But that’s a trend that’s been with us for some time and seems destined to continue.
At GLS, volume was up 9% over last year and 30% over 2019. On the revenue front, we’re looking at an increase of 9.3% over 2020 and a 30.5% boost from the same period in 2019.
Royal Mail share price
On the face of it, these look like impressive figures. But the market appears less than thrilled, with the Royal Mail share price dropping 1% in early trading. It has, however, more than doubled over the past two years.
To find out what all this will do for the bottom line, we won’t have to wait too much longer. Interim results should be with us on 18 November.