A Royal Mail delivery car drives along a road near Mount Pleasant, in London, UK, June 25, 2020. REUTERS / John Sibley
July 20 (Reuters) – Royal Mail (RMG.L) said it would rename its holding company International Distributions Services Plc and could split its UK business, where its workers are willing to go on strike over pay if its performance does not improve.
The Royal Mail’s UK business lost 92 million pounds ($ 110 million) in the first quarter on revenue, which fell 11.5% as inflation-hit consumers cut back on online shopping and associated with high costs. Packaging volumes have decreased by 15%.
“The severity of earnings decline in the UK is surprisingly sharp, and we believe the consensus of the current year group could halve EBIT,” JP Morgan analysts said in a note.
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Overall, revenue in April-June quarters fell 5. Read also : Netflix Stock: Buy Down (NASDAQ:NFLX).1% and shares in the group slipped 3% in early trading.
The 506-year-old postal and parcel delivery company said on Wednesday it would consider splitting its UK stores and overseas parcel business GLS into two separate companies if no “significant operational change” is achieved.
Revenue at the Amsterdam-based GLS rose 7.8%, generating a £ 94 million operating profit for the quarter.
“The pandemic boom and package volume boosted by the delivery of test kits and packages is over. Royal Mail is currently losing one million pounds a day and the efficiency improvements needed for long-term success have been halted,” said Keith Williams, president of the company. said.
UK inflation hit a new 40-year high in June. That, in stagnant real wage growth, has forced unions across ports, railways and airlines to strike or trigger industrial action as Britain faces its worst cost of living crisis in decades. read more
The CWU union said on Tuesday that more than 115,000 postal workers had voted for Royal Mail to strike over pay, which put them on the path to what could be the biggest industrial action to hit Britain this summer. read more
In response to the CWU announcement, company executives said they were “absolutely ready to pay for a discussion on change.”
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Reporting by Eva Mathews and Yadarisa Shabong in Bengaluru; Edited by Uttaresh.V, Elaine Hardcastle
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