Royal Mail chief executive Rico Back steps down after less than two years
The chief executive of Royal Mail has stepped down after less than two years in the role.
Rico Back has stepped down as group chief executive with immediate effect, and will leave the company on 15 August after more than 30 years.
Back, who joined the company in 1989 and was appointed as chief executive in June 2018, announced his departure as Royal Mail reported that its UK parcels, international and letters business (UKPIL) suffered a £22m revenue hit in April.
Royal Mail also announced this morning that executive directors will not receive a bonus this year. It said around £25m has been set aside for frontline staff, who will be paid a bonus of up to £200 in June.
Chairman Keith Williams, who was previously chairman and chief executive at British Airways, has been appointed as interim executive chair of the group.
Stuart Simpson has been appointed as chief executive of the UKPIL.
The company said today it will launch an internal and external search for a new permanent chief executive.
Back said: “It has been a privilege to lead a company that is so much a part of UK life at this crucial time in its history. I am proud of what I, together with our dedicated and loyal team, helped to build in Royal Mail and GLS. I look forward to seeing Royal Mail
transform into a parcels-led, international delivery company, that continues to touch the lives of millions across the world.”
The company’s revenue has been impacted by the coronavirus crisis. Royal Mail said there has been a “substantial” switch from sending letters to sending parcels in the UK.
Letter revenue plummeted 23 per cent in April, which was partly offset by 36m more parcels.
Hargreaves Lansdown equity analyst Nicholas Hyett said: “Of course the immediate headwinds aren’t really Royal Mail’s fault, but the group went into the current crisis in a less than robust state.”
He said Royal Mail has been “slow to modernise its operations and has repeatedly run into resistance from staff”.
The group’s saving grace is a pretty healthy balance sheet and significant levels of liquidity,” Hyett said.
“However, we suspect Royal Mail is burning through cash at a fair rate of knots in the current climate and that places a time limit on how long Keith Williams has to turn the ship around.
“A background at British Airways may prepare the newly installed Executive Chair for the challenges of a highly unionised workforce, but coronavirus disruption is something quite different.”