Royal Mail PLC is a company based in the UK providing postal and delivery services. The current royal mail share price of 196.95p as of May 24 bears testimony to the massive slump resulting from the company’s recurrent industrial problems in 2022. A series of strike actions by the workforce that grossly disrupted the company’s operations is the prime reason for the full-year loss of £1 billion that pulled down the share prices to a record low level.
Royal Mail Share Price Experiences Incessant Fall
Royal Mail share price UK is going through a free-fall phase. And there is no respite from the downward slide that began a few months ago. Market watchers and shareholders are aware of the heavy losses incurred by the company. The share price royal mail keeps eroding heavily every week. The share price of 196.95p on May 24 decreased by 3.65p from the previous trading session, translating into a loss of 1.82%. The situation is quite alarming if you look at the rate of share price erosion over the past month. Over 4 weeks, Royal Mail shares lost 20.55%, and over 12 months, the share price fell by 37.22%. Let’s look at the financial figures of Royal Mail that should help to establish a correlation with the falling share prices.
Profit and Loss
According to International Distributions Services (IDS), which owns Royal Mail, the operating loss for the year as on March 26, is £1.04 billion. For the same period during the previous year, the company had posted earnings of £250 million. On an underlying basis, Royal Mail which published profits of £416 million last year, is now staring at operating losses of £419 million. IDS attributes the losses to the crippling industrial strike actions. These actions compelled the company to write down £539 million on the value of Royal Mail. Strikes over 18 days hit the company hard, losing £200 million.
In addition, a cyber-attack in January triggered a revenue loss of £20 million. So the company had to stop sending international parcels while businesses and consumers experienced considerable delays. The annual operating loss of IDS amounted to £748 million as compared to the previous year’s profit of £577 million.
A Difficult Year Ahead
It seems that the troubles for IDS concerning Royal Mail are far from over despite a deal with the Communication Workers Union (CWU) in April to increase staff salaries by 10%. Moreover, it also has the due one-time payment of £500. To add to the woes, the company’s CEO, Simon Thompson, in a recent announcement, confirmed that he is stepping down by the year-end. The ongoing investigation of Royal Mail for failing to meet delivery targets in 2022 is more bad news for investors.
However, IDS chairman Keith Williams is optimistic about turning the tables and putting the company back on track. His vision of returning to profits in 2024-25 will likely positively impact royal mail share price in the near future.
