Royal Mail struggling despite strong Christmas

Royal Mail Poor old privatised Royal Mail are still having a bit of a struggle, despite the company seeing a 4% increase, and partially benefiting from the collapse of City Link, over the Christmas period.

Royal Mail's CEO Moya Greene said she has no option but to push through further cost-cutting, amid predictions that 3,000 more jobs will go across the company.

“The sad demise of City Link demonstrates what we have been saying - the UK parcels market remains highly competitive, with significant over-capacity,”

“These conditions – of too many players chasing traffic – will continue to put pressure on prices for the next couple of years. We firmly believe the long-term prospects for the delivery sector remain positive, underpinned as it is by the continued growth in e-retailing,”

Royal Mail managed to deliver over 120 million parcels during Christmas - some even in time for the big day! - a rise of 4% over last year. Its shares rose by 4% on Thursday after it predicted full-year profits would be in line with expectations.

However, despite the rise in the share price, they've still lost more than a quarter of its value since the £3.3bn stock market flotation 18 months ago.

Greene reckoned her postmen and women provided an excellent service over the festive period: “This is because we started to plan for Christmas in April, putting investment behind extra sorting capacity with 10 temporary hubs and training around 19,000 extra people.”

The Royal Mail has shed nearly 50,000 positions in the last decade, and another 3,000 are teetering on the brink in 2015.

1 comment

  • Denny
    "However, despite the rise in the share price, they’ve still lost more than a quarter of its value since the £3.3bn stock market flotation 18 months ago." No, the shares are only marginally below the 450 closing price on the day they floated. They've lost about a quarter of the value from the (insane) highs they reached in the months after they floated, peaking at over £6 in January last year.

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