An Introduction to Royal Mail
Royal Mail, a name synonymous with the pulse of British communication, has weathered the tides of time and technology, with roots tracing back to 1516. Today, in an age where emails and digital communication dominate, Royal Mail remains an enduring institution, working ro adapt to meet the evolving needs of a modern society.
In this article, we will look at Royal Mail’s financial landscape, uncovering the essential metrics that underpin this long standing postal and courier service. Beyond the iconic red postboxes and familiar-shaped vans lies a company that not only delivers letters and parcels but has also consistently delivered value to its investors. From annual revenue figures to key financial indicators, we delve into the numbers that drive the company’s performance.
As investors, understanding Royal Mail’s financial health is about more than just numbers on a balance sheet; it’s about understanding the resilience of a company that has navigated through challenges and seized opportunities.
What does Royal Mail Do?
International Distributions Services plc (formerly Royal Mail plc), trading as Royal Mail, Parcelforce and GLS, is a British multinational postal service and courier company, originally established in 1516 as a government department.
Did Royal Mail Change Its Name?
Yes – in July 2022, Royal Mail changed its name to International Distributions Services plc in order to avoid confusion between the holding company and the UK residential postal arm of its group of services.
Royal Mail Earnings 💰📈
Royal Mail Company Overview
Publically Available: 31st July 1635
Headquarters: St James’ Square, London, England
Founder: King Henry VIII
CEO: Martin Seidenberg (since August 2023)
2022 Employee Count: 157,241
Stock Symbol: LON: IDS
Traded on: London Stock Exchange
Royal Mail’s Annual Revenue From 2011
Annual revenue is the total amount of money a company earns from business operations in a year before any deductions for returns, the cost of goods it sold, and expenses.
In 2023, International Distributions Services (Royal Mail) forecasts an annual revenue of £12.04b, which would be a -5.25% (decrease) on the previous year (2022). Revenue for the company tends to be volatile year on year, with the worst year over the last decade being 2017 where their annual revenue only hit £9.776b. Whereas their best year came in 2022, with an annual revenue of £12.712b.
|Year||Revenue (£GBP Billions)||YoY % Change|
Royal Mail Latest Annual Basic Earnings Per Share
Earnings per share are a company’s net earnings (or losses) divided by the number of shares outstanding.
IDS Historical Annual Basic Earnings Per Share
Royal Mail Annual Net Income
A company’s net income is defined as its net profit or loss after all revenues, income items, and expenses have been taken into account.
Royal Mail’s net income for the fiscal year 2022 was £612M, down 1.29% (8 M) from the previous year, where the income sat at £620M.
How much International Distributions Services plc has earned in other years (going back to 2013) can be seen in the following table:
|Year||Annual Net Income (£GBP in Millions)|
Royal Mail Quarterly Market Capitalisation From 2018
Market capitalisation, or market cap, is the total value of a company’s outstanding shares of stock, (both those which are publicly traded and any held by individuals inside the company. The company currently has a market cap which allows inclusion into the FTSE 250.
|Month/Year||Market Cap (£GBP Billions)|
Note: These market caps correspond to the end of month data for each Quarter ending March, June, September and December.
Royal Mail Stock Market Facts
Despite revenue decline in recent years alongside disruptions to service due to reducing standards of working conditions leading to strike action, International Distributions Services plc still manages to show adaptability towards the evolving demands of the courier landscape.
- Privatisation History: In 2013, the UK government privatised Royal Mail in a historic IPO, raising approximately £1.7 billion.
- Revenue Growth: Royal Mail reported annual revenues of £10.8 billion for the fiscal year 2019-2020, showcasing its continued financial strength despite industry challenges. 2021 gave a 16.58% improvement in year on year growth, largely thanks to its handling of the first waves of the COVID-19 Pandemic.
- Parcel Powerhouse: The company’s parcel delivery segment has experienced remarkable growth, with parcels accounting for over half of its revenue in recent years as letter-writing continues to decline and more services offering online ticketing, receipt and invoicing/statement options.
- E-commerce Impact: The surge in e-commerce during the COVID-19 pandemic led to a significant boost in Royal Mail’s parcel delivery volumes, further bolstering its financial performance.
Can I buy Royal Mail Shares?
Yes. If your chosen stock broker is able to help you trade equities on the FTSE 250 index, then you will be able to buy and sell Royal Mail (International Distributions Services plc) shares.
What is Royal Mail’s stock symbol?
Royal Mail’s stock symbol was ROYML until July 2022, when it was changed to IDSI.
If you’re looking for historical Royal Mail information online, it’s important to check whether the name change was taken into account or not post-2022.
Is Royal Mail stock a good buy?
While Royal Mail has had some challenges over the past few years post initial Covid lockdown, many investors appreciate the solid P/E Ratio and mostly-consistent dividend. However, to get a robust idea of Royal Mail share performance and how it might fit into your portfolio, you can use our InvestingPro tool to discover the comparison metrics that matter most to you.
When does Royal Mail report earnings?
Historically, Royal Mail has reported earnings during early May and mid November each year.
Does Royal Mail pay dividends?
Yes, Royal Mail often pays dividends to its shareholders. However, there have been instances in recent years wherein dividends have been cut (not paid). While the current dividend yield sits at more than 3%, it’s important to take other factors into consideration also.
Royal Mail stock split history
As of September 2023, Royal Mail (International Distributions Services plc) has never had a stock split.
How much is Royal Mail worth?
As of its latest quarterly report, Royal Mail is worth £2.67 billion (based on market capitalisation). To check historical market cap prices, scroll up to the section where we show Royal Mail Market Capitalisation From 2018.
Key Royal Mail Facts and Statistics
- Royal Mail can trace its origins back to 1516 when it was established by King Henry VIII.
- The Royal Mail is one of the world’s oldest postal services.
- In 2013, Royal Mail was privatized by the UK government.
- Royal Mail introduced the first iconic red pillar boxes in 1852.
- Royal Mail lost its monopoly on the UK postal service in 2006.
- Royal Mail produces its own stamps, including commemorative and special edition ones.
- The monarch’s profile appears on all UK postage stamps.
- Royal Mail delivers mail to the entire UK, from Land’s End in Cornwall to John o’ Groats in Scotland. This includes providing mail delivery services to remote and rural areas of the UK, often to places not covered by newer courier services.
- Royal Mail delivers mail six days a week, Monday through Saturday.
- As of 2022, the company employs over 150,000 postal workers and operates a fleet of over 47,000 vehicles.
- In the 1700s there were a series of contracts signed by postmaster Ralph Allen to develop and expand Britain’s postal network. Two coach companies, Wilson & Company of London and Williams & Company of Bath, were signed to deliver mail to a further radius of inhabitants. These coaches bore the Royal Mail livery.
- During the Christmas season, Royal Mail delivers around 150 million parcels each week.
- The Postal Museum in London offers insights into the history of Royal Mail.
- London’s underground postal train, the Mail Rail, was in operation from 1927 to 2003.
- Royal Mail has a universal service obligation to deliver mail across the UK at a uniform tariff.
- It has released innovative stamps like ones with augmented reality features. Current general UK stamps include QR codes.
- Royal Mail has experienced several strikes in its history due to labor disputes, including those ongoing from 2022 through 2023.
- Parcel deliveries have increased significantly due to e-commerce, making it a key revenue driver.
- Royal Mail has issued stamps featuring historical figures like William Shakespeare and Florence Nightingale, as well as popular fictional characters such as Peter Rabbit and Doctor Who.
- Royal Mail has implemented strict sustainability measures to reduce its carbon footprint.
- Royal Mail’s postal workers wear distinctive uniforms, which vary based on their roles.
- Royal Mail holds annual competitions for schoolchildren to design stamps.
- To celebrate British gold medalists after the 2012 London Olympics and Paralympics, Royal Mail painted postboxes gold in their hometowns. To date, more than 100 postboxes have been changed up and down the British Isles.
- Arguably the most famous Royal Mail postal worker is the classic children’s character Postman Pat. However, Royal Mail stopped sponsoring Postman Pat in 2000, saying that the character no longer fit the company’s corporate image.
Royal Mail Services
This company has a range of services directed at both individuals and businesses.
1. Letter Mail Services:
Royal Mail continues to be a trusted name in letter mail delivery, ensuring letters and documents reach their destinations promptly. With its universal service obligation, Royal Mail covers the entire UK, including remote areas, ensuring a consistent and accessible letter delivery service that may not be otherwise obtainable through other couriers.
- Benefits: Reliable, nationwide delivery with options for tracked and recorded services, giving customers peace of mind.
2. Parcel Services:
Royal Mail’s parcel services are tailored to the demands of the e-commerce era, offering various options for sending and receiving parcels. Their extensive network, including local post offices and parcel drop-off (and pick-up) points, makes it convenient for customers to send and collect parcels. They also offer a ‘Parcel Collect’ service where parcels are collected from the customer’s doorstep.
- Benefits: Convenience, flexibility, and competitive pricing for both individuals and businesses. Options include standard, tracked, and special delivery services.
3. International Services:
International services connect the UK to the global market, with options for sending mail and parcels worldwide. Royal Mail’s international reputation for trustworthiness and efficiency, backed by its global network and partnerships, sets it apart from competitors.
- Benefits: Reliable international delivery, customs support, and tracking for customers expanding their reach beyond the UK. This is especially important post-Brexit.
4. Business Solutions:
Tailored business solutions including bulk mailing, franking machines, and eCommerce services serve companies of all sizes and types. Royal Mail’s deep understanding of the UK market, combined with its logistics expertise, helps businesses streamline their operations and reach customers effectively.
- Benefits: Cost-effective solutions that enhance efficiency, branding, and customer experience.
Number of Royal Mail Users
According to their latest official ESG report, 10.7 billion letters and parcels are delivered each year. While this would be roughly 159 letters for every single person in the UK, this number includes mail sent out by businesses, so it’s safe to assume that this data certainly isn’t reflective of the average household.
Why Are Fewer People Using Royal Mail?
Service delivery volume (through the UK segment of the Royal Mail Group) has been on a downward trend since 2017. This is mostly a shift due to lower letter numbers, as parcel delivery for this section of Royal Mail continues on an upward trend. There are a number of factors influencing this, including additional competition from other companies, the further increase in electronic communication, greater amounts of online (e-commerce) shopping, and a reduction in paper-based business-related communications.
Leadership and Key Executives
Between 2019 and 2023 – largely as a result of communication challenges with unions and the aftermath of the first COVID-19 wave – the role of CEO changed hands no fewer than four times.
Martin Seidenberg has been the Chief Executive Officer and the Director of the company since August 2023, replacing Simon Thompson who had served in this position since January 2021. Previously, Seidenberg served as the Chairman and Chief Executive Officer of GLS Group, the growth of which under his leadership was a driving factor behind his appointment as CEO of Royal Mail. He also served in various senior leadership roles at Deutsche Post DHL including as the Chief Executive Officer of the DACH region at DHL Supply Chain.
Mick Jeavons has been the Chief Financial Officer and a Director of the company since 2021. He joined the company in 1993 and held various senior leadership roles, including Corporate Finance Director, and Chief of Staff to the Chief Executive Officer at the time.
Other current executives include Mark Amsden (General Counsel; Secretary), Nick Langden (Chief Commercial Officer). The non-executive board comprises Keith Williams (Chairman), Lynne Peacock, Maria De Cunha, Michael Findlay and Sarah Hogg.
Who Created Royal Mail?
The credit for creating what would come to be known as Royal Mail (and later renamed as International Distributions Services) goes to King Henry VIII of England.
Who Owns Royal Mail?
As the company is publicly limited, it is therefore owned by its shareholders.
Who is International Distribution Services plc’s CEO?
Martin Seidenberg (as of August 2023).
Market Position and Royal Mail Competitors
According to research conducted by shipping company Pitney Bowes in its latest Parcel Shipping Index with data on UK carrier market share, the top five carriers in the UK account for 75% of UK parcel shipments by volume. These are Royal Mail (35%), Amazon Logistics (15%), Hermes (10%), UPS (8%) and DHL (7%).
While this still places Royal Mail ahead of the pack, research from 2014 suggests that the UK domestic parcels market was more highly fragmented, with 16 major national carriers. At this time, Royal Mail Group had a market share of 38% by revenue and 52% by volume (including large letters used for fulfilment).
Who are Royal Mail’s biggest competitors?
Royal Mail’s biggest competitors are currently Amazon Logistics, Hermes, UPS and DHL.
Royal Mail Historical Timeline
Royal Mail has a rich history spanning more than half a millennia.
1516 – Henry VIII creates the position of ‘Master of the Posts’ and knights Brian Tuke as the first Master. The service starts to establish itself in key towns country-wide, but this formalised postal network only serves the Monarch and the rest of the royal court.
1635 – King Charles I opens up the postal service to the public. A Letter Office is established in London and six post roads are formalised to carry mail across the country. At this point, postage is paid by the person who receives the letter (not by the sender), and the recipient is allowed to reject the mail and therefore not incur the charge.
1642 – The service is interrupted by the English Civil War.
1660 – Charles II signs the General Post Office Act, allowing non-royals to use the service. Post begins to be moved from office to office for distribution or sorting, rather than door-to-door.
1661 – The world’s first postmark is used. It shows the date of dispatch and is designed to give confidence in the mail’s speed and reliability.
1711 – A unified postal service begins across Scotland, England and Wales thanks to the General Post Office Act. (Ireland joins later, sometime in 1808).
1784 – The service is now known as the Royal Mail, as the process was built on the distribution system for royal and government documents.
1821 – Steam-driven cargo (‘packet’) ships are introduced to deliver mail further afield to other members of the Commonwealth and other parts of the British Empire.
1830 – The first train route is created from Liverpool to Manchester, thanks to an agreement between the General Post Office and the two railway lines.
1839 – Standard (uniform) postage rates are introduced in order to make the tariff system easier and less expensive. From now, it is the sender that pre-pays the postage cost.
1840 – The world’s first adhesive postal stamp, the Penny Black (featuring the profile of Queen Victoria), is launched. More than 68 million of these stamps are used within the first 12 months. Postal stationery and envelopes also begin to appear. According to the Royal Mail website, mail volumes rise from 67 million in 1839 to 242 million by 1844. They jump to more than 1 billion letters a year by 1875.
1852-1853 – The Channel Islands trial the use of post-boxes. They are quickly introduced to the rest of the British mainland, and to begin with are green in colour and prominently feature the insignia of the current reigning monarch.
1883 – Parcel Post is created due to the rising need for individuals to be able to send post bigger than a letter. The job title of ‘Letter Carrier’ is replaced with ‘Postman’.
1901 – The Association of Post Office Women Clerks is founded. It’s the first association in the UK civil service to represent female clerical workers.
1907 – Motor vehicles are used in the postal service for the first time.
1908 – Employees receive a company pension, a year before the countrywide state pension was introduced.
1911 – The first scheduled Airmail service flew from Hendon to Windsor during the coronation celebration of George V.
1914-1918 – During the Great War, more than 12,000 postal workers serve in The Post Office Rifles. Three employees are awarded the Victoria Cross. The war also meant a huge rise in letters and parcels being sent overseas to the front lines. According to records, some 2,500 staff handled more than 12 million letters and parcels a week.
1959 – Postcodes were trialled in Norwich and later rolled out nationally (between 1965-1972). The format allows for more than 48 million unique combinations, which makes it one of the most precise postcode systems in the world.
1968 – Another world first as First and Second Class letter services are introduced, allowing senders to decide on the expediency (and cost) of their mail.
2000 – The company renames itself Consignia in an immediately highly unpopular move with both the public as well as the organisation’s employees, and the Communication Workers Union boycotts the new name.
2002 – Consignia changes its name back and becomes Royal Mail Group.
2006 – Online postage is launched, which is a service allowing the general public to pay for, download and print their own stamps.
2007 – Royal Mail removes the option for Sunday collections from all postboxes.
2010 – The first female CEO, Moya Greene, is appointed. She is the first woman to lead Royal Mail.
2012 – Royal Mail celebrates the London 2012 Olympics and Paralympics by issuing 43 stamps celebrating Team GB’s Gold Medal winning athletes. They also paint over 90 post boxes gold to celebrate UK athletes’ success in both games.
2014 – Royal Mail is on record as having made the sixth largest contribution to the UK economy of all UK corporations.
2015 – The Dow Jones Sustainability Indices names Royal Mail as the global sustainability leader in its sector.
2016 – Royal Mail celebrates 500 years of history.
2017 – 100 electric vehicles are purchased for the UK fleet and are deployed to various delivery offices around the UK.
2018 – Ofcom fines Royal Mail £50M for breaching European Union competition law. Ofcom found that Royal Mail had abused its dominant letter-delivery position in 2014.
2022 – Royal Mail was removed from the FTSE 100 and became instead a constituent of the FTSE 250. During its Annual General Meeting in July, the company also announced that the holding company would change its name to International Distributions Services, while maintaining the trading name of Royal Mail.
Future Outlook and Growth Strategy
Keith Williams, Non-Executive Director, commented in the company’s 2022 full-year results:
“We are at a crossroads with the transformation of Royal Mail. We need to adapt our business to a post pandemic world and whilst we are making progress in some areas, more needs to be done in others. We need to accelerate and broaden the scope of change to meet the demands of our customers, deliver real efficiency savings with a financial benefit this year and beyond, and remain competitive to support sustainable growth and secure jobs for the future.” – Source
The company has also committed to maintaining wholesale and business incentives through 2023 and into 2024 in an effort to win back spending that either went elsewhere or stopped completely during the first COVID-19 wave in 2020-2021.
Social Impact and Corporate Responsibility
Royal Mail produces a robust ESG report each year, outlining its performance to date, upcoming initiatives, new developments and compliance status. It also outlines both Sustainability and Environmental work on its official website, where it says:
“We are committed to providing sustainable services for our customers and communities as we deliver against our environmental ambitions.” – Source: RM Environment Page.
Currently, more than 50,000 electric vehicles are used by Royal Mail on a day-to-day basis, and they are aiming to become an entirely carbon zero business by the end of 2040. As part of a core innovation move, as of 2021 they’re also working on a project which may see letters and small parcels delivered by drone.
A key strand of Royal Mail’s Environmental, Social and Governance (ESG) strategy, the company invested £5.6 million across 2021-2022.
Partnerships and Collaborations
Although the company doesn’t offer employee visa sponsorships, it does nevertheless work with organisations and charities. In 2022, it was one of the official sponsors for the Commonwealth Games in Birmingham, and in the past it has partnered with charities such as Action for Children and the British Heart Foundation.
Royal Mail, with its deep-rooted history and commitment to both adaptability and ESG standards, has cemented its enduring importance in the postal and delivery sector. Beyond logistics, it serves as a critical link connecting communities, businesses, and individuals across the UK.
In an era of rapid change and evolving landscape of postal and delivery services, Royal Mail’s widespread presence serves as a cornerstone of its industry leadership.
Frequently Asked Questions
Is UK Mail and Royal Mail the same?
No, these are two separate entities.
Does Royal Mail own the Post Office?
Royal Mail and the Post Office are separate companies with independent Boards. Royal Mail provides a universal postal service through its letter and parcel delivery, whereas The Post Office is the nationwide network of brick-and-mortar (and online) branches offering a range of postal, Government and financial services.
Is Royal Mail in the FTSE 100?
No, Royal Mail dropped out of the FTSE 100 in July 2022. However, it is currently one of the top risers in the FTSE 250.
Does Royal Mail only deliver to the UK?
No, the company is able to deliver letters and parcels worldwide. The fee depends on the size/weight of the parcel and the recipient’s location.
InvestingPro: Your Key to Royal Mail (IDS) Data
Try InvestingPro For Free! 🛠️📈