We’ve seen an update from Royal Mail this morning and although it’s badged as covering a nine month period up to December 24th, critically it offers some insight as to how the company fared in the run up to Christmas. Letter volumes continue to ebb away, although the 5% drop wasn’t as marked as expected. More importantly the parcels business is still growing with volumes up 6% and revenues up 4% with some 149 million parcels being handled during December. The company is also positive over discussions with the unions, although the threat of strike action will always be casting a shadow.
Another Christmas trading update from the retail sector, this time from Halfords who have posted strong numbers for the 15 weeks to January 12th. Revenues for the group were up 3.2% and although there were some signs of contraction in areas like Travel Solutions, this is explained away by legislation changes driving more sales of child car seats in the previous year. Healthy growth continues to be seen in the cycling division, with sales up almost 8% here – this seems to be a hidden success story of UK retail.
Third quarter numbers from Whitbread have been released although this covers the period to November 30th so misses the impact of Christmas. Interestingly, revenue growth is being delivered from expansion, rather than improving the current situation, so this translates into falling occupancy levels at its Premier Inn hotels. The group is keen to explain this away on the basis that it opened an increased number of properties earlier last year than it did in 2016, but has the scope for further margin improvement in the business now run out?