Nov 22, 2018

Shareholders slam Royal Mail after US writedowns

Shareholders have demanded answers from Royal Mail after the UK postal operator wrote down 85 per cent of the value of two recently-acquired US parcel delivery businesses, adding to doubts over its international expansion. Last week it revealed it was writing down their value by £68m. Both US businesses were acquired through Royal Mail's international parcels division, GLS. Shareholders have asked for meetings with the company's management to discuss its strategy as it continues with a North American acquisition spree, paying C$360m for Dicom Canada. Royal Mail described the US writedown as a "Prudent" measure that was largely against goodwill - the amount paid for an acquired company in excess of the net assets, and essentially an estimate of future earnings. Royal Mail reported the two US businesses made an operating loss of $8m in the first half of the year. Royal Mail says its west coast operation offers a faster and cheaper service than rivals such as FedX and UPS..

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