Authored by Evgenia Filimianova via The Epoch Times,
Royal Mail has suffered a full-year loss of more than £1 billion, leaving it trading at a loss as it recovers from the impacts of industrial action.
A 94-page document (pdf) by Royal Mail’s owner International Distributions Services (IDS), reported that the group swung to an operating loss of £1.04 billion for the year to March 26, against earnings of £250 million in 2021–2022.
IDS also revealed Royal Mail’s adjusted operating loss was £419 million against £416 million profit a year before. The report cited industrial action as the reason for the loss, in addition to an inability to deliver the in-year benefits of planned productivity improvements, lower numbers of COVID-19 test kits being returned, and a weaker online retail market.
IDS booked a £539 million writedown on the value of Royal Mail, given the “current risk backdrop and ongoing industrial dispute.”
Thousands of staff members launched a series of strikes in December 2022, disrupting the services in the run-up to the busy Christmas season.
Disagreement over pay and work practices between the members of the Communications Workers Union (CWU) and Royal Mail executives are at the root of the long-running industrial dispute. The disagreement that began last year resulted in 18 days of strike action across the business.
CWU and Royal Mail negotiators struck a deal and announced the Business Recovery, Transformation, and Growth Agreement (pdf) at the end of April. The agreement set out provisions to “jointly rebuild and transform the business” and included a pay offer as well as improvements made during negotiations.
The non-executive chair of Royal Mail Group Keith Williams has welcomed the agreement that will be put to a vote by CWU members.
“I said before that we had reached a crossroads at Royal Mail. Now that we have a negotiators agreement with CWU that will shortly go out to ballot, and thanks to the good progress made on our five-point plan to stabilise Royal Mail, our destination is coming into sight,” Williams said.
“There is now a clear path towards a more competitive and profitable Royal Mail, delivering improved services for our customers whilst further reducing our environmental impact.
“Importantly, if ratified, the CWU agreement provides greater job security and increased rewards—through both pay and profit share—for our employees. Successful delivery of the agreement will be key,” Williams added.
The CWU said the agreement could “stand the test of time, that moves us forward and moves the company forward,” following the “most bitter, most intense, and high-risk dispute this union’s ever been involved in.”
Quality of Service
In the financial results report, IDS also attributed Royal Mail’s “disappointing” quality of service to strikes and absences, but said an improvement plan was underway.
“Quality of service has been significantly affected by industrial action and high levels of absence. I am sorry that we have not delivered the high standards of service our customers expect. Improving quality of service is our top priority,” Williams said.
The agreement with CWU provides for pay increases over the two years to March 2025 at a cumulative cost of around £600 million. According to IDS, this is expected to be broadly covered by cost efficiencies, with changes to working practices, network changes, and attendance policies introduced successively over the next two years.
“So as we enter 2023–24 we have grounds for optimism. The economic climate remains challenging, and Royal Mail faces the task of rebuilding business from the damage caused by industrial action,” Williams said.
CWU released its annual account results on May 18, reporting that Royal Mail workers had delivered an excellent public service.
CWU Deputy General Secretary Terry Pullinger said the results demonstrated that “postal workers have delivered in the face of grossly unfair and intense competition, overbearing naval gazing regulation, and perpetual technological change.”
Tyler Durden
Fri, 05/19/2023 – 03:30
