May 17, 2018

Royal Mail pins hopes on booming parcel delivery

New EU rules on data protection have led Royal Mail to forecast that the decline in letters sent by Britons will be at the higher end of its previous estimates, as the postal operator delivered a more than one-third drop in annual profit. As the amount of paper correspondence falls because of electronic communications, Royal Mail is pinning its future on parcel delivery, which is booming with the rise of e-commerce. Shares in Royal Mail fell 5 per cent by late Thursday morning to 566.6p. The stock recently touched its highest point since the company's 2013 flotation. Overshadowing Ms Greene's valedictory as the head of Britain's postal service was the revelation a day before that Royal Mail paid £5.8m to its incoming chief executive to buy out his contract as the head of its overseas parcels subsidiary GLS. Royal Mail said it felt provisions in the contract of Rico Back, which gave certain management control rights and dated back to its takeover of a business he previously ran that became GLS, were "Increasingly inappropriate and needed to be removed". Royal Mail closed its defined benefit retirement scheme this year following a long industrial dispute with trade unions.

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