Royal Mail post warning on profits and costs sending shares tumbling

Post by **TrueBlueTerrier** » 01 Oct 2018, 16:35

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Shares in Royal Mail have tumbled after the company posted a warning on profits and costs.

The UK post company said it expected its adjusted operating profit to be between £500m and £550m for the year, down from £694m the previous year.

It also lowered its cost-saving target to £100m from the previous forecast of £230m.

Shares fell 14 per cent following the unexpected announcement on Monday afternoon.

Chief executive Rico Black said: “Trading conditions in the UK are challenging.

Our letter volumes, especially marketing mail, are impacted by ongoing structural decline, business uncertainty and GDPR.

“While we now expect addressed letter volume declines outside our forecast range this year, we are maintaining our medium-term guidance.”

He added: “Our UK productivity and cost performance has been disappointing.

“Against this backdrop, we are lowering our targets for cost avoidance and productivity improvements for 2018-19.”

Post by **TrueBlueTerrier** » 01 Oct 2018, 16:36

Royal Mail says UK letters volumes and productivity down, shares plunge

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The company said that addressed letter volumes were down 7% in the first half with a similar decline expected for the full year
Royal Mail says UK letters volumes and productivity down, shares plunge
The Royal Mail said its UK productivity performance had also been “significantly below plan”
Royal Mail PLC (LON:RMG) said trading conditions in the UK were challenging and that its letters volumes had fallen sharply, sending its shares plummeting.

The postal group said on Monday that its letter volumes, especially marketing mail, had been impacted by ongoing structural decline, business uncertainty and General Data Protection Regulations (GDPR).

“In the UK, letter volumes are being impacted by ongoing structural declines, business uncertainty and GDPR, such that addressed letter volume is down 7% in H1 2018/19,” the company said in a statement.

“We anticipate a similar decline for the full year. Our medium-term outlook for addressed letter volume declines of between 4-6% per annum (excluding political parties' election mailings) is unchanged,” it added.

The company also said that its UK productivity performance had been “significantly below plan” at 0.1% during the first half and that it expects the full year performance to be significantly below target – at the upper end of its 2 to 3% range.

As a result, it now sees its 2018/19 cost avoidance target lowered from £230mln to £100mln and is implementing a range of short-term cost actions. Given these factors, the company expects group adjusted operating profit before transformation costs to be in the range of £500mln to £550mln on a 52 week basis.

On a more positive note, it said that its UK parcels business was performing well. UK parcel revenue and volumes were up 6% during the period. Revenue and volume growth for 2018/19 is now expected to be better than the prior year, it said.

Shares in Royal Mail were 18.3% down at 390.0p in late afternoon trade.

matt76 · Post by **matt76** » 01 Oct 2018, 16:38

No real surprise, management clueless from top to bottom.

Post by **rambo1** » 01 Oct 2018, 16:46

Is this the turning point ,have they realised thay we cannot get any more efficient while the USO is in place. Packets are more labour intensive. The begging of the end for rmg????

worktotime · Post by **worktotime** » 01 Oct 2018, 17:33

[quote="rambo1"]Is this the turning point ,have they realised thay we cannot get any more efficient while the USO is in place. Packets are more labour intensive. The begging of the end for rmg????[/quot
to true , could the uso be under threat now hmm , as his is what they have always wanted s**t loads of job losses if this happens . ,

Yamr1 · Post by **Yamr1** » 01 Oct 2018, 17:39

Don't need line managers , waste of cash....
Managers bonus total waste of money....
Coaches waste of money....
How much would that save ....

lala · Post by **lala** » 01 Oct 2018, 17:52

Anyone who has requested their shares to be sold are going to be a bit grumpy!

Post by **RobertT** » 01 Oct 2018, 17:53

lala wrote:Anyone who has requested their shares to be sold are going to be a bit grumpy!

They sure are.

Down 18% today!

Post by **rambo1** » 01 Oct 2018, 17:56

lala wrote:Anyone who has requested their shares to be sold are going to be a bit grumpy!

Was that new share save scheme starting this morning? If so they'll be grumpy too if they bought at 480!

Post by **RobertT** » 01 Oct 2018, 18:00

rambo1 wrote:
lala wrote:Anyone who has requested their shares to be sold are going to be a bit grumpy!
Was that new share save scheme starting this morning? If so they'll be grumpy too if they bought at 480!

The shares are bought on the 15th of the month.

Post by **wacko74** » 01 Oct 2018, 18:05

This wasn't actually a profits warning... it was a statement stating that 'productivity was below target', two different things.

Wouldn't be surprised if it's the start of a campaign to get the USO watered down, also wouldn't be surprised if RM bosses deliberately timed this announcement so that posties would take a hit on selling shares... just out of sheer spite.

Post by **rambo1** » 01 Oct 2018, 18:25

wacko74 wrote:This wasn't actually a profits warning... it was a statement stating that 'productivity was below target', two different things.

Wouldn't be surprised if it's the start of a campaign to get the USO watered down, also wouldn't be surprised if RM bosses deliberately timed this announcement so that posties would take a hit on selling shares... just out of sheer spite.

Well it's saying £500m as opposed to £650 odd last yr so it ain't good. Also the cost avoidance is not as they were planning. I'd say if they'd cut the divi ,it would be low £3 now.

leolion855 · Post by **leolion855** » 01 Oct 2018, 18:55

https://www.theguardian.com/business/20 ... it-warning" onclick="window.open(this.href);return false;

Post by **ham2505** » 01 Oct 2018, 19:05

Great timing …….just when the first batch of shares due to available to sell tax free.....funny that...….very sneaky......im holding on to all of mine......Parcels up 6%...….this company aint going anywhere......no panic......Buy DONT Sell

Post by **wacko74** » 01 Oct 2018, 19:15

Tried to top up at 3.85 today but annoyingly my share dealing account decided it didn't recognise the password I've been using for years and locked me out.
As for job cuts... offer me 1 year salary tax free snd I'd bite their hand off

ROYALMAILCHAT