Royal Mail cites DM activity by energy companies for ‘good’ second-half start

Royal Mail says the flurry of marketing activity by energy companies to communicate and mitigate the impact of price rises has helped lift revenue at the start of the second half of its financial year.

Royal Mail

Unveiling its first set of results as a private company, Royal Mail says its letters business – which includes direct mail – has had a “good start” to the second-half, which began 29 September, because of “energy company mailings”. Price increases by five of the six big energy suppliers has led to an increase in advertising of their energy efficiency initiatives, while smaller challenger energy brands have ramped up activity to exploit disquiet.

Royal Mail will be hoping the positive start helps offset a 3 per cent dip in revenue from its marketing mail business in the first-half. Revenue from direct mail services hit £545m in the six months to 29 September lower than the same period a year earlier, the company says, because of increased activity during the London 2012 Games.

It flagged the introduction of ‘Mailmark’ barcode reading technology for large customers in July as a possible trigger for future improvements, claiming the £70m investment made “will significantly increase our ability to track addressed letters through our network for these customers.”

Despite the dip in direct mail receipts, strong growth in parcel revenue helped push group revenue up 2 per cent in the first-half. Operating profit almost doubled to £283m, helped by a VAT credit of £35m and lower than expected costs related to privatisation.

Royal Mail launched its first TV campaign in six years to promote its delivery service earlier this month.

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