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Jan 26 (Reuters) – UK’s Royal Mail forecast a narrower loss for the current fiscal year, helped by measures to keep costs low, although its expects cash flow to slip into negative for 2024 as it reels from the impact of a series of strikes, its parent firm said on Thursday.
The 507-year-old Royal Mail, which was privatised in 2013, is in the middle of a crisis after losing millions of pounds due to staff strikes in a long-running row over pay and conditions.
The company now expects an adjusted operating loss near the mid-point of its previous forecast range of 350 million-450 million pounds ($433.5 million-$557.4 million) for the fiscal year ending March 31.
Royal Mail, part of International Distributions Services Plc (IDSI.L), said its 2023 outlook was impacted by strikes on 18 days in the fiscal year – six more than previously expected – with “tight control of costs and strike contingency measures” reining in some of the losses.
The postal and parcel firm said the ongoing labour dispute has further increased the risk of impairment charges in the current fiscal, adding that the annual outlook was based on assumption of no more strikes in the final quarter.
Strikes by British postal workers roiled the key Christmas period after Royal Mail’s largest labour union rejected the company’s revised offer to increase wages by up to 9% over 18 months, instead of the previously planned two years.
Royal Mail’s revenue fell 12.8% year on year in the nine-month period to December end, while total parcel revenue declined 17.8% on a 20% drop in volumes. Parcels account for 54% of the firm’s total revenue.($1 = 0.8074 pounds)
Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Subhranshu Sahu and Anil D’Silva
Our Standards: The Thomson Reuters Trust Principles.
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