Royal Mail Group’s UK domestic parcels business, Parcelforce Worldwide, achieved strong revenuegrowth and record profits in the year ending March 2011.
The express parcels operator increased external revenues by 5% to £420 million. Volumes in thehighly competitive business to business markets grew by 15%, Royal Mail Group said in a brieftrading statement. According to the group’s annual report, Parcelforce handled 63 million parcelsin 2010-11.
Parcelforce Worldwide’s overall growth had outpaced its key rivals and its profits had trebledover the past four years, the company added without disclosing further information. In 2009-10, thebusiness already improved its operating profit by 42% to £17 million on revenues of £399million.
Royal Mail Group’s CEO Moya Greene said: “Parcelforce Worldwide has had an exceptional year. Ina market where competition is open and intense it has increased revenue and profits and hasoutpaced all its key rivals.”
Parcelforce Worldwide is no longer shown as a separate business in Royal Mail Group’s financialresults but has been absorbed into the new ‘UK Letters & Parcels and International’ (UKLPI)segment. This effectively covers all business activities in the UK except for Post Office Ltd andseveral small separate subsidiaries. The European parcels subsidiary GLS is shown as a separatebusiness segment.
The new UK Letters & Parcels and International segment, incorporating Royal Mail Letters andParcelforce Worldwide, had revenues of £6.86 billion in 2010-11, down from nearly £7 billion in theprevious year. It made an operating loss of £120 million after modernisation costs but excludingother exceptional items compared to a small £20 million operating profit in 2009-10. Royal MailLetters made an operating profit of £121 million on revenues of £6.6 billion in 2009-10.
Royal Mail Group’s overall revenues dropped to £9.15 billion in the year ending March 2011 from£9.35 billion the previous year. Operating profit after modernisation costs but excluding otherexceptional items dropped from £180 million last year to £39 million. The group’s net lossbroadened from 258 million in 2009-10 to £320 million in 2010-11.
GLS was the main profit contributor with a 5.3% increase to operating profits of £118 million onstagnating revenues of £1.5 billion.
