Profit fall forecast for Royal Mail as firm prepares for busiest ever Christmas

[TrueBlueTerrier]

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Royal Mail is expected to show a major fall in its profits in the first six months of the financial year, as the company prepares for what promises to be its busiest Christmas on record.

The company’s adjusted operating profit is expected to reach around £9 million, according to an average of analyst estimates provided by Royal Mail.

It would be a large step down from the £165 million adjusted operating profit the delivery giant made in the first half of the last financial year.

Like many businesses, Royal Mail’s 2020 has been heavily defined by the Covid-19 pandemic.

While large parts of the economy switched to working from home, the business’s postal workers were still out making deliveries.

However, what they were carrying changed drastically over the period.

In Royal Mail’s most recent update for shareholders, it revealed the number of parcels postmen and women carried in the five months to the end of August rose by 34%, while letter numbers dropped 28%, compared to the same period a year earlier.

The main reason for the massive change was the sheer number of people stuck at home, who were forced to turn to online retailers to cater to their needs as high street Hargreaves Lansdown analyst Susannah Streeter said: “The shift to digital and the e-commerce boom should have helped boost the fortunes of Royal Mail with so many more packages to deliver.”

With that increase likely to continue through the normally buoyant Christmas period, postal workers are now preparing for what could be their busiest period in history.

But they will also have a lot more colleagues to help share the burden.

Last month, Royal Mail announced it would take on 33,000 temporary workers over the Christmas period to deal with the increased demand it is expecting. It will also run two more sorting centres.

In a normal year the company will hire around 15,000 temporary staff over the period, and its former record was 23,000.

Even with the extra help, the company has urged customers to “shop early, send early for Christmas” in order to avoid the rush in the final run-up to December 25.

But bosses have also tried to tap into the rising market for parcels, by allowing customers to send them straight from their doorstep.

For 72p per package, a postal worker will now pick up a parcel from a customer’s front door, cutting out the need for them to go to the post office.

Investors might hope for some sign of how that has gone in the first few weeks since the service launched nationwide.

Ms Streeter added: “The plan to collect parcels straight from the door should help put more volumes through the network and drive revenues despite the headache of initial set up costs.

“Coronavirus costs will have significantly eaten into profits, but Royal Mail’s reputation has arguably been boosted during the pandemic with staff praised for going the extra mile to keep the essential service running.”

[postieblueshirt]

All those wonderful extra staff and not one of them will be in your delivery office to help you..

[2yearpostie]

All those wonderful extra staff and not one of them will be in your delivery office to help you..

got 3 temps in my office

[spen]

Loads in ours

[rambo1]

With overtime being thrown about like confetti to the willing ,to try and clear offices and parcels priced competitively (they must be or why are we getting so many), there's no wonder we aren't making much profit. Oh, and the mail side of it is most definitely NOT down 30 odd% . We are going to struggle until parcels can be sorted automatically by machine. It's just far far too labour intensive at the moment, anyone with half a brain could have seen it coming, the wages bill must have gone through the roof ATM , with all the people off with covid or isolating it ain't helping either. There's a lot more to making a profit than being busy.

[SpacePhoenix]

DOs can easily have casuals, it's down to whoever does the resourcing in a DO pulling their finger out and getting some organised

We are going to struggle until parcels can be sorted automatically by machine. It's just far far too labour intensive at the moment,

Once that happens, it'll probably be the end of fixed walks. RM would have the data to be able to dynamically generate walks each day

[1560loopsayear]

Feels strange that we're probably working flat out and have never been as productive in clearing our post and mail since lockdown, yet RM aren't making the profits they would like to. What more can we do?

[matthew68]

So we are all completely knackered and probably never had it so busy rushed off our feet, having to chase the manager constantly for going past your time, having managers complain to us when we put in overtime for being late every day. Yet they still say we haven’t made enough profit! They thenSay the COVID payment Is part of our wage rise this year you really couldn’t make it up

[postieblueshirt]

All those wonderful extra staff and not one of them will be in your delivery office to help you..

got 3 temps in my office

Lucky you 26 years in my office never seen a temp or a casual worker all we have are 5 weeks you cant pick for a holiday.so all staff members are theoretically available.

[Post_Alone]

Swings and roundabouts sometimes

[Mr Rush]

Each of us should feel really bad for accepting £5.8million when we started working for Royal Mail. Our boundless selfishness caused this.