Royal Mail is set to acquire same day delivery firm eCourier in a bid to strengthen its same-day proposition throughout the UK. eCourier offers its customers nationwide distribution services although its fleet predominantly operates in the Greater London area. Ian Oliver, the company’s main shareholder and CEO, will remain in his role.
The acquisition of eCourier supports Royal Mail’s strategic objective to enhance its parcel offering, expand its network and capture more value in the fastest growing segments of the UK parcels market.
Same-day delivery is a premium segment of the parcels market, with an estimated value of over £500m (US$763m), with growth predicted at approximately 4-5% annually. While it is principally a B2B market, the B2C segment is expanding rapidly, driven by e-commerce trends and the increasing consumer demand for faster fulfillment.
Moya Greene, CEO, Royal Mail, said, “Today’s announcement marks another milestone in our strategic objective of increasing our presence in growth areas of the parcels market. Same-day deliveries are already one of the fastest growing segments of the UK parcels market.”
Royal Mail also released its half-year financial results today (November 19) for the period running from April to September 2015. The report showed revenue to be flat at approximately £4.4bn (US$6.7bn) when compared with the same period in 2014, with growth in UK and European parcels market offsetting the 4% decline in UK letter revenue.
Commenting on the results, Greene said, “Royal Mail is the pre-eminent letters and parcels carrier in the UK. We have delivered a resilient performance in the first half, demonstrating our ability to respond to a competitive trading environment.
“We delivered parcel volume and revenue growth in the UK, which continues to be a challenging market. Addressed letter volume decline was at the better end of our forecast range. We are driving through a range of product innovations and service improvements at pace, as well as targeting new areas of growth and enhancing our offering.
“As a result of an acceleration of our UK cost savings program and a better than expected performance in GLS, group operating profit before transformation costs was flat in the first half. Given our strategic focus on costs, we now expect underlying UKPIL operating costs to be down by at least 1% for the full year. As in previous years, the full year outcome will be dependent on our important Christmas period, for which we have extensive preparations in place.”
November 19, 2015