Royal Mail letter volumes assessed

[TrueBlueTerrier]

Royal Mail letter volumes assessed as easyJet set to report sky-high profits

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Royal Mail is expected to post a fall in profits when it reports half-year results on Thursday as it struggles against declining letter volumes and faces a regulatory review that could cap prices.

Analysts at Investec expect the firm to post an adjusted operating profit down 5.5% to 284.4 million in its first six months of the year compared to a year ago.

The business has shed around 5,500 staff over the last 12 months and secured around £40 million of savings from a head office reorganisation, but according to brokers at RBC Capital Markets, it will see letter volumes fall by 5%.

Royal Mail chief executive Moya Greene has had a challenging year, which has been framed by the threat posed by the roll-out of Amazon's delivery network, which is expected to have an impact on Royal Mail's targets for parcel delivery growth.

Brokers at Bank of America Merrill Lynch expect to see Royal Mail's half-year parcel volumes rise by 1.5% in what is a competitive market.

In July, the firm's regulator Ofcom said it would launch a ''fundamental review'' into the firm's operations that could see it impose a cap on prices.

Ofcom said its inquiry will look at whether current regulation secures ''the efficient and financially sustainable provision'' of the country's universal postal service.

The universal service is the Royal Mail's commitment to make deliveries to all parts of the UK at a flat rate, six days a week.

The watchdog, which first said it would look at this area last month, has become concerned at the weakening of competition in parts of the letters market.

The letter delivery arm of Whistl and parcel firm City Link have both folded within the last 18 months. The collapse of the letter service run by Whistl - formerly known as TNT - left the Royal Mail with no national competitor in this market.

Ofcom said it will look at the firm's position in the letters market ''and assess the company's potential ability to set wholesale prices in a way that might harm competition''.

The regulator says it may roll back some of the commercial flexibility it granted Royal Mail in 2012, including the ability to put up its prices, as the business has strengthened over the last three years.

The Royal Mail said it will participate fully in Ofcom's review. The watchdog is not expected to report until the middle of next year, but investors will study any comments the company has to say on the process.

In October the Government sold its final stake in the Royal Mail for just over £591 million.

A total of 13% was sold at a price of 455p per share, with the Government's final 1% holding gifted to eligible UK Royal Mail employees, raising their stake in the company to 12%.

The price is notably lower than 500p per share achieved in June, when a 15% stake in the business raised £750 million for the Government.

In total, the Government has raised £3.3 billion from the sale, with proceeds used to pay down the national debt.

[daveyeff]

same shite different day. we all know its bollox. volumes are up.

[Tman]

Don't you find the sand in your eyes and ears a little uncomfortable?

[daveyeff]

of course. we all know its RM propaganda. they think they can brainwash us if they say it enough. but we all know its crap.

[Phantom]

Volumes are definately on the up! I've never had so much declining mail.

[Puppetmaster]

Can someone please explain what is universal service, as in many offices walks do not go out every day and work is brought back and then delivered the next day. That is why so many DOMS are going off sick with stress and more going back to Posties or leaving the business.

[datasaint]

Are large letter dsa/mailsort catalogs counted as letters? Because if you look at what we deliver nowadays >50% of it has got to be advertising material.

If these companies decide it's no longer profitable to advertise this way with the continual rise of online shopping, the bulk of our work could be out the door.

[DGP1]

York of packets a day and volumes are down?
Sometimes I think they don't actually count them but guess a number to fulfill their preconceived views.

[datasaint]

York of packets a day and volumes are down?
Sometimes I think they don't actually count them but guess a number to fulfill their preconceived views.

Packets aren't letters. Letters are vastly more profitable than packets. Packets take up more room, have to be manually sorted at present, take longer to deliver.

[aiden01]

York of packets a day and volumes are down?
Sometimes I think they don't actually count them but guess a number to fulfill their preconceived views.

think its 200 packets to a large red sleeve allegedly we all know if its full of small packets it could be up to 6 or 7 hundred

[rambo1]

of course. we all know its RM propaganda. they think they can brainwash us if they say it enough. but we all know its crap.

Look mate, it isn't all about brainwashing us any more. If they say mail is down the share price will go down, why can't they get that into their heads. They are telling porkies to the wrong people, we know it ain't true, but continuous lies will drag the share price down which isn't good for any of us

[daveyeff]

they've been telling continuous lies for years now though. so much so that I think they don't realise who they are actually saying it to anymore. the ''brainwashing'' is all part of their bare faced lies now.

[TrueBlueTerrier]

Letters are down

At least they are on my delivery - based on my experience of when my duty was created (2005) and it hasn't been changed that much, the decline is noticeable.

The problem is RM keep saying that the volumes have declined, but never point out we have fewer people delivering it. At some point they will reach a stage when they realise that cutting any further will degrade the service, why they haven't now I have no idea.

At some point they have to realise, or be informed by us that there is a physical limit to the amount of walking anyone can do over a week/day without causing injury.

[daveyeff]

ive got more bags now than ive ever had. when I pointed this out to the gaffer that was quoting his 'figures' to me to tell me they were down, his reply was '' that's cos you've got more packets'' my immediate reply to him (which blew his crap out the water)...was ''I don't put the packets in my bag, they go in the van''.....he didn't answer and walked off. nuff said.

[Tman]

The problem is RM keep saying that the volumes have declined, but never point out we have fewer people delivering it..

Maybe because when they say it it's in the context of how their traditional core business is declining, along with every other postal operator's in the World.
It's not a judgement or comment on how hard RM's staff are now working.