LONDON Jan 24 Royal Mail Group, sold
off last October in Britain's biggest privatisation for decades,
said higher prices for posting parcels had helped underlying
group sales rise 2 percent for the nine months to Dec. 29.
The company, whose sale was opposed by unions and opposition
lawmakers and has been criticised since for possibly
short-changing the taxpayer, said on Friday that a switch from
weight to size-based pricing had pushed UK parcels revenue up 8
percent, despite flat volumes, in line with its guidance.
Parcel volumes did rise in December, Royal Mail said,
without saying by how much, as shoppers bought more presents
online, and the company delivered more than 10 million parcels
on its busiest day.
However, Cantor Fitzgerald analyst Robin Byde said that
against a backdrop of record online sales for some British
retailers over Christmas, the parcels performance was
"UK parcels was actually disappointing. Flat year-on-year, I
think most people will look at that and think about a strong
online retailing period in the run-up to Christmas and think
that looks a bit odd," Byde said. He did not expect analyst
forecasts to change on the back of the trading update, he said.
Royal Mail, which is modernising its business to better
compete in a more lucrative parcels market, had faced the threat
of a strike over the Christmas period but managed to agree on a
pay rise with union members last month.
The performance in parcels, which make up half of group
sales, nevertheless helped offset a 3 percent like-for-like
revenue decline in UK letters, hit by increasing use of email
and social media messaging. However, the group's European arm,
GLS, saw a 6 percent rise in underlying revenue.
Royal Mail said the trading performance was in line with its
Its shares were up 0.2 percent at 589 pence by 0838 GMT, or
78 percent higher than the 330p-per-share price Britain sold a
60 percent stake for, valuing the business at 5.9 billion pounds