Royal Mail (LON:RMG) shares fell on Thursday after the postal service posted a 5 percent fall in first-half profit and announced an extensive cost-avoidance plan.

Despite a stronger performance in Europe, fierce competition from Deutsche Post, UK Mail and Amazon’s new delivery service affected profits in the first half of the year. The company announced plans to avoid £600 million in costs by March 2018, a significant rise from its previous £500 million target.

Operating profit fell £320 million in the six months to September 25th, but the results were aided by a 1 percent revenue increase to £4.58 billion.

“The key drivers for the UK letters and parcels markets remain unchanged. Letter volumes, particularly advertising letter volumes, are linked to movements in GDP and we are monitoring developments in the UK economy closely,” Royal Mail said in a statement.

Shares are currently down 4.95 percent to 474.20 pence per share (0910GMT).

17/11/2016