Updates from Royal Mail, Croda and QinetiQ

Royal Mail posts weaker performance


More FTSE 100 weakness on Monday, down 21 points to 6,728.4. Barratt was the biggest faller, slipping 2.59% while Morrisons, again, tumbled further, down 2.42% to 173.70p. Housebuilder Persimmon lost 2.27% to 1246p.

In contrast, Tesco shares climbed 1.24% to 288.65p on the news of boss Philip Clarke's departure. Across the water, the Dow Jones saw an almost 50-point drop to 17,051.7 as Ukrainian tensions rattled investors.

We start with a Royal Mail update for the three months to 29 June. There's been weaker performance in UK parcels, largely driven by the intensifying competitive environment in consumer/SME and export channels Royal Mail says.

Parcels revenue for the year is likely to be lower than it had anticipated. Changes to Amazon's minimum order level for free delivery and expansion of its own delivery network have also cut volumes.

"Our parcels revenue," says Royal Mail, "will be dependent on our performance in the second half, which includes the Christmas trading period, and on no further weakening in our addressable UK parcels market."

Royal Mail holds its first AGM since privatisation on Thursday, likely to be stormy given boss Moya Greene's £1.35m pay deal.

Next, six month numbers from Croda. Currency volatility has cut sales by £38.3m (6.8%). Sales overall were cut 4.5% to £537.4m with Consumer Care seeing a 5% drop to £95.2m.

For the last quarter, sales dip 5.8% to £263.4m. Sales declines were moderated slightly in Personal Care but Polymer Additives, Lubricants and Home Care achieved underlying sales growth above minimum target of 4%, says Croda.

"Our performance," says chairman Martin Flower, "in the first half of the year was behind our initial expectations as weak consumer demand in Europe impacted the business... Despite this, we saw strong underlying revenue growth from New and Protected Products."

Lastly, an interim from QinetiQ. The EMEA Services division performed in line with expectations during the first quarter. Utilisation levels remain high, particularly in the Weapons and Maritime businesses, QinetiQ claims.

But visibility of key orders for Global Products "remains limited"; commercial products and those developed in the UK can't make up for the shortfall in sales of US related products.

"The MOD," says QinetiQ, "transformation programme is likely to create some short-term uncertainty in the UK defence market, and the division's performance as a whole is expected to remain steady this year."

Royal Mail

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