Royal Mail’s owner International Distributions Services PLC, (LSE:IDS), saw his shares rise 2% today after it revealed the cost of industrial actions on the business.
According to a trading statement, the company stated that the net cost of strike action for the nine months ending December 2022 was approximately £200mln and an adjusted operating loss was £295mln.
IDS stated that it expects an adjusted operating loss for Royal Mail to remain at the midpoint of the current £350mln-£450mln guidance range. This is due to tight cost control and strike contingency plans.
This meant that strike action was not halted for another day.
In the nine-month period, revenue was 12.8% lower year over year. The performance continued to be driven by a structural decline in letters, weaker trends in retail, the impact on industrial disruption (18 strike days) and lower test kit volumes.
The total letter revenue fell 6.1% and the total parcel revenue decreased 17.8%. Volumes were down 20%.
According to the company, the voluntary redundancies needed to achieve the 10,000 job cuts required by August 2023 will be significantly lower than the 5,000 to 6,000 reported in October.
IDS reported that GLS volume decreased 2% in the last nine months while revenue grew 9.7% sterling.
The adjusted operating margin of 7.5% for nine months was 100 basis points lower than the prior year.
GLS maintained its guidance for revenue growth year-on-year of high single digit percent. The company also tightened its guidance regarding adjusted operating profit from EUR380mln up to EUR400mln (previously EUR370mln up to EUR410mln).