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Royal Mail parent International Distribution Services said on Thursday that it was still targeting an adjusted operating profit for the year, as it announced the appointment of Martin Seidenberg as its new chief executive officer.
In an update for the three months to the end of June, the company said group revenue rose 3% year-on-year to £3bn.
Revenue at Royal Mail fell 4% to £1.8bn, in line with expectations. IDS said domestic parcel volumes were broadly as expected, with a slightly weaker revenue performance due to price/mix and lower test kit volumes.
In GLS, revenues were up 7.4% to £1.2bn. IDS said volume growth of 4% was slightly ahead of expectations, offsetting the impact of lower fuel surcharges and weaker freight revenues.
The company said its outlook was unchanged and it’s still aiming for a group adjusted operating profit in 2023-24.
Also on Thursday, IDS announced that Seidenberg will become CEO next month. He will be appointing CEOs for Royal Mail and GLS responsible for operational management of the two subsidiaries in due course.
Seidenberg joined GLS in 2015 as CEO of GLS Germany and was appointed as CEO of GLS in June 2020. Prior to joining the group, he spent 15 years at Deutsche Post DHL, where he held a variety of logistics, strategy and CEO roles internationally.
At 0950 BST, IDS shares were up 3.5% at 276.16p.
Matt Britzman, equity analyst at Hargreaves Lansdown, said: “When you consider the turmoil that’s plagued Royal Mail over the past year or so, with persistent strikes and lacklustre performance, it’s still a little surprising to see updates with no major issues.
“But don’t confuse the lack of any major issues with a business that’s delivering on all cylinders, at this stage just one cylinder would be welcome – but we’re not there yet. The positive CWU vote earlier in the month paves the way for a recovery and should all but extinguish the chances of further strikes – but now the real work begins. Parcel and letter volumes continue to be on a downward trend and the business is expected to be heavily loss-making this year.”
