The half-year profit of Roial Mail dropped by more than half, after privatized postal services recorded a decline in revenue in the UK's main business and failed to hit the targets of savings and productivity and costs.
The FTSE 100 group last month warned of a damaging profit that sent its shares to the lowest level since the stock market in 2013.
Operating difficulties were reflected in its provisional financial results, which led to a further decrease in stock prices by 5 percent. Profit before tax fell to 33 million pounds in the six months to September 23, down from 77 million euros in the same period of the previous year – a decrease of 57 percent.
However, revenues grew by 1% on a base basis to 4.9 billion pounds, as its international packing unit, GLS, was made for lower sales in the UK.
Combating Roial Mail to reduce greater efficiency from its vast network, together with the worse expected decline in the number of letters sent by the British and the higher labor costs in the GLS, were factors lagging behind in reducing earnings in October.
The company needs to improve productivity to recover the cost of a widespread workforce affected earlier this year, preventing the threat of state strikes in Britain. In addition to increasing wages and new pension schemes, management also promised a reduction in working hours.
The CEO of Rico Back, in the role since June, said that productivity effects over the second half of the year exceeded a slight 0.1 percent improvement recorded in the first six months, well below the annual target of 2-3 percent.
Most of this will come through changes in the ways in which mail is processed and processed, and not a reduction in the number of jobs, said Mr. Back.
"We have 90% of our letters automated, but only 10% of the package," he told the Financial Times. "Tests have been designed to deal with increasing quantities in plots by increasing automation."
On Thursday morning, its oil price fell to 330.3p – just a shadow over their initial public bid for 2013 from 330p.
"Today's edition did not provide any new information about the look for Roial Mail after a profit warning," analysts Investec wrote. "We are not closer to establishing how long the current survey of United Kingdom measurements and initiatives will be conducted … or to understand the long-term strategy of the new management team."
Investors will have to wait until March for more details when the company maintains a capital market day that predicts its vision for the next five years.
Although profit margins declined at GLS, which in the past few years has been a strong place for Roial Mail, concern over the ability of the group to continue to increase its dividend will be somewhat limited after the temporary payment rose from 7.7p to 8p.
The disappointing half-year performance limited what was a turbulent year for Roial Mail.
After an agreement with the Communications Union, they discarded the threat of industrial disagreements, during the summer, Roial Mail's leaders set up one of the biggest investors in this type of British corporate history due to excessive salaries.
Preferred Roial Mail's earnings-adjusted operating profit before transformation costs – was 25% lower at 242 million pounds in the half-year period. The metric excludes costs from a long-term modernization program.
The company has confirmed a reduced annual profit of between £ 500 million and £ 550 million, compared with € 694 million in the previous financial year.