Royal Mail’s share price tumbled 14% last Thursday, after the company released its half-year results and warned that it could operate at a loss next year. The drop took around £320 million off Royal Mail’s stock market value.
While the company reported its best UK revenue performance in five years, it admitted that it had fallen behind on its £1.8 billion plan to shift its focus away from letter delivery to parcel delivery. An expected decline in letter volume for the year was also higher than previously projected, rising from 5-7% to 7-9%.
Royal Mail took the opportunity to speak out against planned Christmas strike action.
“Industrial action, or the threat of it, can only hurt our company, and our colleagues,” said CEO Rico Back. “That is because, in today’s postal market, our customers have choices. Consumers can send a text or email when they would have written a letter; and shippers can choose from a wide range of delivery companies, not just Royal Mail.”
The warning came after the Communication Workers Union lodged an appeal against a high court injunction won by Royal Mail to stop strikes in the run-up to Christmas. 97% of a 76% turnout of members voted in favour of strikes, but a high court judge agreed with Royal Mail that there had been “improper interference” by the CWU in the balloting process.
Header image: Diana Akhmetianova