July 17, 2018 / 6:34 AM / 4 months ago

Royal Mail says businesses uncertain after new data privacy law

A Royal Mail post box is seen in Sonning, Britain, a village where British Prime Minister Theresa May has a home, July 8, 2018. Picture taken July 8, 2018. To match Special Report BRITAIN-EU/MAY REUTERS/Henry Nicholls

(Reuters) - Britain’s Royal Mail Plc (RMG.L) said on Tuesday some customers remained uncertain about the new European data privacy law as it reported a decline in the number of letters it delivered in its first quarter.

The law came into effect on May 25 and imposed new requirements on how companies collect personal information in the European Union, posing a challenge to businesses that use promotional mailers to push sales.

Royal Mail had already warned in May that the new law, General Data Protection Regulation (GDPR), may reduce marketing mails.

The company said on Tuesday it was working with customers to find solutions for their marketing mail needs.

The company reiterated that it expects the drop in letter volumes to come in at the higher end of its previously announced 4-6 percent range for 2018 and 2019, adding that the decline may come in outside the range as well. It fell 6 percent in the quarter ended June 24.

The decline in letter volumes was just about offset by a 7 percent increase in parcel volumes that helped lift total revenue by 2 percent.

To counter slowing letter volumes, Royal Mail has been investing in its fast-growing European parcel business GLS to increase revenue from outside Britain.

Revenue at GLS rose 11 percent, with volumes rising 10 percent, as the unit benefits from a boom in deliveries by retail customers.

The company said it continues to expect a good performance in GLS for the year, although margins may be hurt by labour market pressures.

Reporting by Arathy S Nair in Bengaluru; Editing by Saumyadeb Chakrabarty

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