- Election mail boosts Royal Mail revenues
- Revenues rose to £2 billion in June
- Czech billionaire Kretinsky proposes £3.6 billion merger
Royal Mail revenues were boosted by general election-related mail and stamp price increases, offsetting lower letter deliveries in recent months.
Parent firm International Distribution Services (IDS) generated £2 billion in revenue in the three months to June, up from £1.8 billion the previous year.
On Thursday, IDS also encouraged shareholders to support the bid to be bought by Czech entrepreneur Daniel Kretinsky in a multibillion-pound transaction.
The overall number of parcels delivered climbed by 11% to £315 million year on year.
However, Royal Mail saw the volume of addressed letters, excluding election mail, fall by 4% compared to the previous year.
During the general election campaign, millions of poll cards, postal ballots, and candidate mail drove an 11 percent increase in total letter sales.
IDS stated that the increase was also driven by price increases, with the cost of some first and second-class stamps rising in April.
The group’s revenues, which include European parcel firm GLS, climbed by 8% to £3.3 billion in the most recent quarter.
IDS said it was ‘unanimously recommending shareholders accept the offer’ from Mr Kretinsky’s EP Group after agreeing to a £3.6 billion merger in May.
“Unlock your financial potential with free Webull shares in the UK.”
Mr Kretinsky committed on Wednesday to retain the service’s Universal Service Obligation, which requires letters to be delivered six days a week throughout the UK.
Royal Mail, whose iconic red post boxes with the Royal Crest dot the country, is regaining market share after facing labor strikes, increased competition, and rising expenses. It has urged Ofcom, the regulator, to accelerate improvements to the universal postal service.
Martin Seidenberg, IDS’s CEO, reaffirmed the organization’s calls to alter the service obligation as letters continue to drop.
‘While we are making significant work on our change at Royal Mail, we cannot do it all on our own, and we urgently need regulatory reform of the Universal Service,’ he stated.
He said, “Letter volumes have declined from 20 billion at their peak to just 6.7 billion now, making the one-price-goes-anywhere Universal Service unsustainable in its current form.”
‘Ofcom plans to deliver an update on Universal Service reform this summer.
‘We urge Ofcom to engage rapidly on the modifications required to ensure an efficient, financially viable Universal Service that safeguards what customers value most.’
IDS shares rose 0.2p to 336.20p on Thursday after rising more than 28% in the previous year.
