Royal Mail profits expected to drop

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Image credit: PA
Image credit: PA

Royal Mail shifted 164 million parcels during December, with parcel volumes and revenues up 6% in nine months on an underlying basis. To prepare for the 2018 peak season Royal Mail recruited 23,000 seasonal workers and opened six temporary sorting centres.

 

However, the decline in the number of people sending post throughout the year - down 8% in the nine months to 23 December - is expected to have a negative impact on Royal Mail’s profits.

 

In its latest trading update covering the months ending 23 December 2018, Rico Back, group chief executive officer at Royal Mail plc, commented: “In the UK, our parcels business continued to perform well, with volumes and revenue in the nine months both up 6%.

 

“Addressed letter volumes, excluding the impact of elections, were down 8%, with total letter revenue down 6%, largely reflecting the continuing impact of GDPR and a relatively strong prior year comparative period.

 

“Due to our letters performance to date, we expect addressed letter volume declines, excluding elections, to be in the range of 7-8% for 2018-19. While the rate of e-substitution remains in line with our expectations, business uncertainty is impacting letter volumes.

 

“As a result, addressed letter volume declines, excluding elections, are likely to be outside our forecast medium-term range next year. Otherwise, we are reconfirming the outlook and other guidance for 2018-19 provided in our half-year results.”

 

www.royalmailgroup.com

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