Royal Mail (LON:RMG) shares surged at market open on Thursday, before falling into negative trading after reporting a 30 percent fall in profits.
The company is struggling to deal with increasing competition from other carriers, undergoing a cost-cutting plan to designed to stabilise its finances. The company saw some improvement over the period, with revenues rising 5.4pc to £4.8 billion in the 26, but were dogged by a fall in pre-tax profits to £77 million.
Royal Mail are also facing a battle over its pension scheme, with the company hoping to transfer workers onto a new defined-benefit scheme against strong union opposition.
Terry Pullinger, deputy general secretary of the Communication Workers Union, saying he would rather “smash Royal Mail to bits” than accept the changes. Royal Mail are hoping to instigate the new plan from March 2018, after it was found that without the changes pension costs would triple. The High Court have already blocked plans for a worker strike in response to the changes.
Over Christmas the group announced that it would open six temporary parcel sort centres and recruit over 20,000 staff to handle the surge in letters and parcels.
However, throughout the rest of the year Royal Mail have been hit by a steady decline in the number of letters being posted, having a negative effect on revenue. Operating profit is set to fall by 26 percent to £183 million after a 6 percent decline in revenue.
Shares in Royal Mail are currently trading down 0.21 percent at 388.20 (1415GMT).
