Politics

Royal Mail chief executive departs after less than two years as revenues slide

Royal Mail PLC (LON:RMG) shocked markets today as it announced the departure of chief executive Rico Back after less than two years in the role.

Back has left with immediate effect with Keith Williams stepping up to become group executive chairman and finance head Stuart Simpson assuming an interim CEO position at the Royal Mail (UKPIL) business.

Bonuses to executive directors have also been axed and the postal group will pay staff a £25mln bonus to frontline staff who have worked through the coronavirus crisis.

Those who have been at work since March will receive up to £200 cash.

Royal Mail made the announcement alongside a trading update which revealed revenues had slumped by £22 million in April even with a sharp rise in parcel volumes.

UK parcel traffic rose by 31% compared to a year ago with revenue up 20%, but this was offset by a sharp fall in letters as businesses closed due to the lockdown.

Letter volumes fell by a third with revenue 23% lower.

Costs also rose by £40mln as the mail service used overtime and agency staff to cover absences due to coronavirus.

The rate of UK absence has now fallen to 11% from a peak of over 20%, with fewer than 200 people furloughed.

Saturday deliveries are scheduled to resume on 13 June, said Royal Mail, adding the situation at parcels arm GLS is still evolving with a shift from B2B to B2C parcels across all markets in the UK and overseas.

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