Jan 29, 2019

Opening Quote: Royal Mail — still waiting for delivery

Royal Mail reported that its profits more than halved in the six months to September because a new pay deal designed to increase productivity delivered an improvement of minus 0.2 per cent. More parcels were delivered: volumes and revenue in the nine months were both up 6 per cent, as at the half year stage. Addressed letter volumes, excluding the impact of elections, were down 8 per cent, with total letter revenue down 6 per cent - compared with 7 per cent declines in both in the first half. Royal Mail's most recent full-year profit guidance was for adjusted operating profit before transformation costs of £500-550m. Analysts' consensus estimate was £509m. OQ verdict: Shareholders have been waiting for chief executive Rico Back to deliver on costs and productivity - and they are still waiting. In 2018, its shares fell by 40 per cent against a sector average of minus 27 per cent.

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