By International Distribution Services announced that its pretax loss has increased, primarily due to losses from its Royal Mail unit. The company has also revised its adjusted operating performance guidance.
Financial Results
For the six months ended September 24, the postal service and courier company reported a pretax loss of £194 million ($240.9 million). This represents a wider loss compared to the same period last year when the loss was £127 million.
Revenue for the first half of fiscal 2024 experienced a slight increase, reaching £5.86 billion compared to £5.84 billion in the previous year.
Performance Analysis
Royal Mail’s revenue decreased by 2.9% year-on-year, while GLS, the general logistics systems business, saw a 5.9% rise in revenue. The decline in Royal Mail revenue was primarily driven by lower parcel revenue and volumes, partially offset by an increase in total letter revenue.
The adjusted operating loss, which excludes exceptional and other one-off items, amounted to £169 million. This is a significant increase from the £57 million loss reported during the same period last year. While GLS achieved a profit, it was outweighed by the losses incurred by Royal Mail, as anticipated.
Outlook
International Distribution Services now expects to achieve breakeven in its adjusted operating performance for the full year. This is a departure from its previous guidance in July, which indicated a projected adjusted operating profit for fiscal 2024.
Additionally, the company did not declare an interim dividend. However, it expressed its intention to provide a modest full-year dividend from GLS.
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