Royal Mail provided a Q1 update, reporting Royal Mail is losing one million pounds daily.
Yikes, let’s dive in…
The postal service stated revenue was down 11.5% year on year in the first quarter to £1.88 billion, reflecting weakening retail trends, lower test kit volumes, and a return to a structural decline in letters.
I think the last letter I sent was to Santa. Sooo…I can see why profits are falling.
Furthermore, the business reported an adjusted operating loss of £92 million. Royal mail believed this reflected the inflexibility in the cost base to adjust to lower volumes and disappointing performance on deliveries.
“The pandemic boom in parcel volumes bolstered by the delivery of test kits and parcels is over,” commented Chair of Royal Mail Keith Williams.
Williams continued, “Royal Mail is currently losing one million pounds per day and the efficiency improvements which are needed for long term success have stalled.”
Royal Mail shares are down 2.35%.
The company reported they now anticipate a lower level of efficiency savings in FY22/23. In addition, Royal Mail expects the adjusted operating profit level to be around breakeven.
The news comes a day after more than 115,000 postal workers voted to strike at Royal Mail over pay. A troubling situation for the postal service.
Can their shares recover?