Sep 8, 2020
City Bulletin: Royal Mail warns of ‘material loss’ in UK despite online surge
Among the highest profile is Royal Mail, which warns on Monday morning that it "Will not become profitable without substantial business change" and expects a "Material loss" in its domestic division during the 2020 to 2021 financial year. Royal Mail's parcel business and its GLS international parcel business have been booming thanks to the online shopping surge of recent months. The company said that while that had increased GLS profits - revenues for the full year could be twice the level the group set out in June, under an updated scenario showing what the impact of Covid-19 might be - it hadn't stopped the "Long-term decline" in Royal Mail profits. Royal Mail's UK revenues could also be higher than thought in June under the updated scenario, though the company warned costs have also climbed because of the pandemic. The extended promotion period promises to support retailers' sales volumes but threatens to erode profit margins and some executives worry that retailers risk wearing out consumers.
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