(Alliance News) - Royal Mail PLC fell on Wednesday warned on expected "fluctuations" in volumes as lockdown restrictions start to ease, in spite of revenue growth in the first quarter of its financial year.
The company remained the worst performer in the FTSE 100 index, down 2.4% at 518.00 pence in London despite remaining confident on its full-year prospects.
For the three months to the end of June, revenue was up 13% at GBP3.16 billion from GBP2.81 billion the same period a year prior and 20% higher than two years ago.
"The domestic parcel market remains strong. The early signs are that domestic parcel volumes appear to be re-basing at a higher level than pre-Covid as consumers continue to shop online. While domestic parcel volumes decreased 7% year on year, they increased by more than a third, up 35%, compared to pre-Covid levels in 2019-20," the company noted.
Royal Mail retained its full-year expectations, with the GLS business expected to show low single digit revenue growth.
Chair Keith Williams said: "We continue to expect fluctuations in volumes as we emerge from Covid restrictions, which we will need to manage accordingly. Nonetheless we are encouraged by the revenue performance across Royal Mail and GLS in the first quarter."
First quarter revenue for both its Royal Mail and GLS divisions was higher than the prior year. For Royal Mail, parcel volumes decreased and letter volumes increased compared to the exceptional period last year encompassing the UK's first lockdown, when non-essential retailers closed for the first time.
For GLS, parcel volume growth continued albeit at a slower rate, due to the exceptionally strong comparators from the same period last year due to the national lockdown.
Royal Mail plans to publish its interim results on November 18.
By Will Paige; willpaige@alliancenews.com
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