Shares in Royal Mail Group (LON:RMG) have fallen deep into the red in London this morning as the postal operator revealed a drop in its full-year profits. In a separate development, Sky News reported last night that the company’s new chief executive Rico Back was given a €6.6-million (£5.8 million) payment to buy him out of his previous contract.
As of 08:38 BST, Royal Mail’s share price had given up 4.32 percent to 572.00p. The shares are underperforming the broader UK market, with the benchmark FTSE 100 having climbed into positive territory and currently standing 0.12 percent higher at 7,743.86 points.
Royal Mail posts results
Royal Mail announced in a statement this morning that its operating profit before transformation costs had fallen to £236 million in the financial year ended March 25, from £490 million in the prior-year period. The postal operator’s revenue meanwhile rose two percent to £10.17 billion, while profit before tax slipped to £212 million, from £335 million.
“It has been another successful year, despite the challenging environment,” the group’s outgoing chief executive Moya Greene commented in the statement. Going forward, Royal Mail reiterated its outlook for addressed letter volume declines of between four to six percent per year over the medium term while cautioning that the decline was expected to come in at the higher end of the range for the 2018-19 year due to the introduction of General Data Protection Regulation (GDPR).
Payment to Rico Back
Sky News reported last night that the board of Royal Mail had handed the group’s new chief executive Rico Back €6.6 million to compensate him for payments he had been guaranteed under his previous deal as a boss of the company’s GLS division. Insiders indicated to the newswire that the move will be disclosed by the postal operator in its annual report which is due to be published in the next few weeks. Royal Mail, however, reportedly paid the money to Back last July, nine months before the announcement that he would replace Moya Greene at the helm of the company.