Royal Mail owner International Distributions Services PLC (LSE:IDS) still failed to convince the City this week of its investment case.
Investment bank Liberum stood by its advice to investors to sell the group's shares because of the company’s slow recovery and tough market conditions.
The bank argues that Royal Mail faces low revenue growth, high competition, declining letter volumes, limited productivity improvements, and pricing challenges.
The group’s chief executive Martin Seidenberg called for urgent reform and asked for government help, while analysts said the situation suggested a deterioration at Royal Mail and a loss of investor confidence.
Its global logistics business, GLS, performed better but faced cost pressures and competition. The group said it would pay a dividend funded by GLS, but that Royal Mail would not contribute to it.
The owner of Royal Mail reported a bigger loss in the first half of the year, with the CEO claiming the network was not sustainable with the decline in letter volumes.
Revenue was relatively flat, with growth in its global logistics business GLS offsetting the drop in Royal Mail’s revenue. The group expects to break even for the full year.