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Feb. 6, 2020, 4:23 a.m. EST

Royal Mail shares slump on lowered mail volume guidance

Shares of Royal Mail (LON:UK:RMG) dropped 8.4% as the company lowered its outlook for letter volumes in the next fiscal year by 1 percentage point to a decline between 7% and 9%, and said there's an increased likelihood that its U.K. parcels, international and letters arm will be loss making. Productivity in the current year is estimated to grow 2% versus previous guidance of 1.5%. Analysts at Bernstein Research said the company will have to choose between funding its transformation plan or its dividend, as the faster decline in letter volumes could take out between £25 million and £30 million per year in revenue and cash flow.

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