Royal Mail says United Kingdom letters volumes and productivity down, shares plunge

Marco Green
October 2, 2018

Royal Mail shares have fallen nearly 15% in late trading after warning on profits in an unscheduled update.

The announcement sparked a drop in Royal Mail's share price from 490.8 to a low of 381.0 pence, the company's biggest decline since it debuted on the London stock exchange in 2013.

Royal Mail has shocked the City by warning that profits will be lower than expected after missing key cost-saving and productivity targets and suffering from a decline in the volume of letters being sent.

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

Chief executive Rico Back said trading conditions in the United Kingdom were "challenging" with letter volumes - especially marketing mail - hit by "ongoing structural decline" as well as business uncertainty and new rules on how companies collect and process personal data.

"In the United Kingdom, 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.

Meanwhile, a target for ramping up productivity was partly impacted by a "challenging agenda" on working conditions and new technology following an agreement with unions.

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