Yahoo Finance Royal Mail shares hit record low as email continues to kill the letter
Royal Mail (RMG.L) shares cratered in early trading after the previously nationalised British postal service reported a larger than expected decline in letter volumes.
The stock price tumbled by as much as 18% before trading around the 11% mark later in the morning.
Royal Mail has had to review its operations and testing methods amid more people switching to email.
It has had to also look into its automation services to deliver letters and parcels in order to cut costs, a process which have been slower than expected.
“Due to our letters performance to date, we expect addressed letter volume declines, excluding elections, to be in the range of 7-8% for 2018-19,” said Rico Back, CEO of Royal Mail in a statement.
“While the rate of e-substitution remains in line with our expectations, business uncertainty is impacting letter volumes.
“As a result, addressed letter volume declines, excluding elections, are likely to be outside our forecast medium-term range next year.
“Otherwise, we are reconfirming the outlook and other guidance for 2018-19 provided in our half-year results.”
The Royal Mail has been battling the decline of letters for more than a decade.
But the business has only been in the private sector for a few years, with privatisation of the institution completed in 2015 after hundreds of years in public hands.
