Fri, 24th May 2019
Royal Mail’s new chief executive promised to boost the performance of the group, including conducting a review of its UK postal network, after the group announced that it’s first-half profits had more than halved.
Rico Back took the job as chief executive in June, and says that the company is examining its organizational structure and management roles, as it is faced with a decline in the number of people sending letters.
The group said that pre-tax profits for the six months leading up to the 23 September were down to £33 million, from £77 million. The group says that it is testing new ways to deliver letters, and to automate some deliveries, to cut costs and make the group more efficient. They also said that they would be changing prices in the UK, and that they would be making changes to other markets as well. There are plans to introduce more synergies between Royal Mail and GLS parcels.
Back says that the last few months have been challenging for the company. Royal Mail employs 140,000 people, and the company wants to put more emphasis on how they connect customers through their domestic and international businesses, as well as putting a clearer focus on financial performance and on management accountability. Previous attempts to reduce costs have not progressed at the rate that was initially hoped, in part because of difficulties implementing agreements with trade unions over working conditions, pay and pensions. Productivity declined during the first half of the financial year, and it is unclear whether it is likely to get back on track for the end of the year.