Q1 Trading Update

International Distributions Svc PLC

20 July 2023

 

International Distributions Services plc

(Incorporated in England and Wales)

Company Number: 8680755

LSE Share Code: IDS

ISIN: GB00BDVZYZ77

LEI: 213800TCZZU84G8Z2M70

20 July 2023

TRADING UPDATE FOR THE FIRST QUARTER APRIL TO JUNE 2023

International Distributions Services plc (IDS.L) will hold its 2023 Annual General Meeting (AGM) today at 11.00 and is providing an update on the Group's trading in the first quarter of FY2023-24.

Key points:

· Royal Mail total revenue down 4.0% year on year in the first quarter, as expected. Domestic parcel volumes broadly as expected, with slightly weaker revenue performance due to price/mix and lower test kit volumes. Focus remains on improving quality of service including targeted recruitment, effective management of sick absence and deployment of a "nerve centre" to support most impacted units; 

· Addressed letter volume more robust than expected, which combined with pricing actions led to stronger revenue performance, particularly in business mail. However, addressed letter volumes down 30% since pre pandemic, highlighting the need for Ofcom and Government to take urgent action to reform the Universal Service.

· Welcome result of CWU ballot on Business Recovery, Transformation and Growth Agreement: 76% yes vote on the highest ever turnout for a CWU consultative ballot (67%); planning commenced for further revisions to improve productivity and quality of service; progressing with trials to underpin indoor method changes programme; new attendance standards and sick pay arrangements from 1 August.

· GLS revenue growth 7.4% year on year in the first quarter, (4.3% in Euro terms, including acquisitions and working day negative impact of c. 1%); volume growth of 4%, slightly ahead of expectations, offsetting impact of lower fuel surcharges and weaker freight revenues; economic backdrop mixed across different markets; investing in automation and other productivity measures to mitigate expected margin pressures.

· Outlook: unchanged, still targeting Group adjusted operating profit in 2023-24 (before voluntary redundancy costs in Royal Mail).

· As announced separately today, Martin Seidenberg has been appointed Group Chief Executive Officer (CEO) of IDS plc, and will take up the post in August 2023.

PERFORMANCE FOR THE FIRST QUARTER (APRIL TO JUNE 2023)

	3 months ended June			% change5
Volume (m)	2023	2022	2019	2023 vs. 2022	2023 vs 2019
Royal Mail
Total Parcels1	283	314	310	(10)%	(9)%
Domestic   Parcels (ex. international)4	250	276	242	(9)%	4%
International6	32	37	69	(13)%	(53)%
Addressed1   Letters (ex. elections)	1,703	1,856	2,416	(8)%	(30)%
GLS	219	211	160	4%	37%

	3 months ended June			% change5
Revenue (£m)	2023	2022	2019	2023 vs. 2022	2023 vs 2019
Group3	3,008	2,998	2,627	0.3%	14.5%
Royal Mail	1,808	1,883	1,876	(4.0)%	(3.6)%
Total Parcels	923	1,012	875	(8.8)%	5.4%
Domestic1   Parcels (ex. international)4	767	843	668	(9.0)%	14.8%
International6	156	169	207	(7.8)%	(24.8)%
Letters1	886	871	1,000	1.7%	(11.5)%
GLS2	1,203	1,120	760	7.4%	58.3%

1.        Includes negative working day effect of c. 0.5% on Royal Mai domestic parcel revenue year on year, due to extra bank holiday in May.

2.        Revenue growth year on year in Euros was 5.3%, adjusting for the impact of acquisitions and working day effects.

3.        Royal Mail and GLS revenue does not equal Group revenue due to the elimination of intragroup trading.

4.        Domestic Parcels excludes import and export for both Royal Mail and Parcelforce Worldwide.

5.        % changes based on reported numbers.

6.        International includes import and export for Royal Mail and Parcelforce Worldwide.

Enquiries:

Investor Relations

John Crosse

Email: [e-mail]

Media Relations

Jenny Hall

Phone: [phone]

Email: [e-mail]

Greg Sage

Phone: [phone]

Email: [e-mail]

Royal Mail press office: [e-mail]

Company Secretary

Mark Amsden

Email: [e-mail]

The person responsible for arranging the release of this announcement on behalf of IDS plc is Mark Amsden, Company Secretary.

Financial Calendar

FY 2023-24 Interim Results                                16 November 2023

FORWARD-LOOKING STATEMENTS

This document contains certain forward-looking statements concerning the Group's business, financial condition, results of operations and certain Group's plans, objectives, assumptions, projections, expectations or beliefs with respect to these items. Forward-looking statements are sometimes, but not always, identified by their use of a date in the future or such words as 'anticipates', 'aims', 'due', 'could', 'may', 'will', 'would', 'should', 'expects', 'believes', 'intends', 'plans', 'potential', 'targets', 'goal', 'forecasts' or 'estimates' or similar expressions or negatives thereof.

Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the Group's actual financial condition, performance and results to differ materially from the plans, goals, objectives and expectations set out in the forward-looking statements included in this document.

All written or verbal forward-looking statements, made in this document or made subsequently, which are attributable to the Group or any persons acting on its behalf are expressly qualified in their entirety by the factors referred to above. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements. No assurance can be given that the forward-looking statements in this document will be realised; actual events or results may differ materially as a result of risks and uncertainties facing the Group. Subject to compliance with applicable law and regulation, the Group does not intend to update the forward-looking statements in this document to reflect events or circumstances after the date of this document, and does not undertake any obligation to do so.

 

END