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| - Britain's Royal Mail on Friday said Rico Back had stepped down as chief executive, as the coronavirus heaps more pressure on its core letters business and hikes group costs. Back, who leaves with immediate effect, had been CEO for less than two years after replacing Moya Greene, who oversaw the group's privatisation. Chairman Keith Williams takes over on an interim basis, "to lead discussions with stakeholders about an accelerated pace of change across the business", the group said. Royal Mail said it delivered 308 million fewer letters in the five weeks to May 3, down 33 percent from a year earlier. Parcel deliveries jumped 31 percent but this was not enough to offset the slump in letters. Total revenue from UK parcels, international and letters tumbled by £22 million ($26.5 million, 24.5 million euros) in the reporting period, Royal Mail added in a statement. Costs jumped £40 million, "driven by overtime and agency resource costs due to high levels of absence, the introduction of social distancing measures" and protective equipment for Royal Mail staff. The company said that "in recognition of the role played by frontline staff" during the virus crisis, around £25 million would be paid out in cash awards, while executive directors will forgo bonuses for 2019/20. "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," Back said in the group's release. "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." Nicholas Hyett, equity analyst at Hargreaves Lansdown, said "the coronavirus crisis has accelerated many existing trends, and unfortunately for Royal Mail one of those is the decline in addressed letters. "That long, slow decline is no longer slow by anyone's measure, and the volumes have probably been lost for good -- companies and individuals that have discovered digital alternatives to increasingly expensive stamped envelopes will not go back." Hyett said the company's "saving grace is a pretty healthy balance sheet and significant levels of liquidity". "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." bcp/rfj/wai
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