Jan 19, 2017
Royal Mail shares hit after sharp drop in letters
Shares in Royal Mail dropped more than 5 per cent after the group reported a drop in letters delivered before the festive period as business uncertainty in the UK hit junk mailings. While the company said trading was in line with its expectations, shares slumped 5.5 per cent in morning trading on Thursday to 425.4p. As it grapples with a structural downturn in the letter post that was once its mainstay, Royal Mail is up against fierce competition in parcels delivery, a market that is growing due to the boom in ecommerce. Business concerns in the run-up to and aftermath of the Brexit referendum were blamed by the company for a sharp drop in marketing mail in the first half of the company's financial year. Addressed letter volumes fell 6 per cent in the nine-month period, while total revenue from letters was down 5 per cent. "We are seeing the impact of overall business uncertainty in the UK on letter volumes, in particular advertising and business letters," the company said.
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