Parcel business keeps revenue buoyant at Royal Mail
Archant Norfolk 2016
Buoyant parcel sales are offsetting falling letter deliveries at Royal Mail as it grapples with business' continuing uncertainty around the recent shake-up of personal data rules.
The group reported a 7% fall in letter revenues in the three months to June 24 while UK parcel revenues rose 6%.
While this lefty revenues in the UK division down 1%, it said overall group underlying revenues were up 2% after an 11% rise in turnover at its European parcels business, General Logistics Systems (GLS).
Royal Mail reiterated its warned that it could see a steeper-than-expected drop in letter mailings due to the new General Data Protection Regulation (GDPR) changes and added that it is “monitoring any potential impact closely”.
The first-quarter figures come just days ahead of what is expected to be a fraught meeting with shareholders.
Royal Mail is preparing for a showdown with investors at its annual general meeting (AGM) amid anger over a near-£6m “golden hello” for new boss Rico Back.
Mr Back – the former boss of GLS who took over from Moya Greene as group chief executive last month – was awarded the hefty sum to buy out his contract at GLS in order to replace it with a new one ahead of his appointment as chief executive.
A number of shareholder advisory services groups have urged investors to vote against Royal Mail’s executive pay plans at the AGM on Thursday in protest at Mr Back’s payout.
Mr Back is also being paid a £640,000 annual salary, which is £100,000 more than his predecessor.
On the first-quarter trading performance, Mr Back said: “Our performance in UK letters and parcels was as anticipated and GLS continued to perform strongly.”
He added that the group was “making progress” on changes over pensions and pay plans for its workforce.