Royal Mail float sealed by profits

[TrueBlueTerrier]

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PROFITS at Royal Mail have more than doubled to between £300 million and £400 million it is set to reveal this week, ­paving the way for a ­multibillion pound flotation on the stock market later this year.

A £3 billion-plus listing on the London market as early as the autumn is the favourite option for the Royal Mail as ministers prepare to privatise it. Some of the stock could be offered to the public.

The Royal Mail, which ­delivers parcels and letters, generates annual turnover of about £9 billion and employs 150,000 people.

The latest full-year results to March 31, 2013, are due to be unveiled on Tuesday.

The expected strong results for the year will indicate it is now attractive to investors, ­firing the ­starting gun on privatisation. The Post Office branch network, now a separate entity, will remain in public hands.

Last year the Royal Mail, ­excluding the Post Office, made operating profits of £152 million.

Profits are rising due to the success of the parcel ­deliveries operation. To March 2012 the business handled 1.2 billion parcels.

In the six months to the end of September 2012, operating profits at the Royal Mail ­increased from £12 million to £144 million.

If stock markets turn and a float proves tricky, ministers may revert to Plan B and sell part of Royal Mail to a financial or trade buyer. It emerged last month that the Coalition has reached out to the buyout firms, including CVC Capital Partners, to gauge their ­interest in the company.

Our overarching objective remains to safeguard the one-price-goes-anywhere, six-days-a-week universal service

Staff will be offered a stake of at least 10 per cent in the ­company as part of the planned privatisation.

Despite the promise of shares, the CWU, the union which represents postmen, wants the Royal Mail to stay in public hands but with better access to capital. It has stoked fears that the cost of a stamp could rise to £1 post privatisation and that the universal service would be threatened.

However, this service, which stipulates six-day-a?week ­collection and delivery, is enshrined in statute. It can only be changed if voted for by both Houses of Parliament.

Business minister Michael Fallon, in charge of selling off Royal Mail, said recently: “Our overarching objective remains to safeguard the one-price-goes-anywhere, six-days-a-week universal service.”

Postal workers are to be ­balloted this month on whether to boycott the post of rival ­companies. Results are due in mid-June.

[cyclemech1]

As Churchill said, 'There are lies, damned lies and Royal Mail accounts', (well sort of).

As others have said, when the Colleagueshares scheme matured the company was worthless, now Hey Presto, it's worth billions. Doesn't anybody audit RM's accounts or is it all hidden in smoke and mirrors?

I smell loads of rats!

[hans solo]

yes the unions lawyers went through all rms figures but have as yet to reveal details
especially when colleague share payout was due
smell a rat anyone

[UnhappyGremlin]

Amazing what difference a year can make.
This time last year(or was it the year before?) RM was valued at ZERO. And we got jack s**t for our colleague shares. Now privatisation is looming, we are making anything up to £400m profit, and the company is worth between £2.5bn and £4bn.
And they wonder why we are suspicious of them, and no longer believe the s**t that pours from their mouths.

[Lounge Lizard]

"The Royal Mail, which ­delivers parcels and letters ....." - nice of the Express to make things clear for its readers.

[Martin Walsh]

you don't need to be a genius to understand that the biggest price rises in a generation as well as some key asserts like Rathbone Place has helped. Equally GLS still contribute the bulk of Royal Mail's profits and of course they have no pension deficit. It is clearly another 3 card trick ahead of a sell off.

[Cut Off King]

It is clearly another 3 card trick ahead of a sell off.

RM & Gov. will try any trick in the book to pull the wool over the publics eyes.

[fishtank]

you don't need to be a genius to understand that the biggest price rises in a generation as well as some key asserts like Rathbone Place has helped. Equally GLS still contribute the bulk of Royal Mail's profits and of course they have no pension deficit. It is clearly another 3 card trick ahead of a sell off.

It might be all that but that is not the position we should be taking in order to fight privatisation.
We should be playing these profits up as proof that the company does not need "external capital" and we should be asking the Government uncomfortable questions about why it wants to sell the golden goose that can make £400 million in profit.

3 card trick or not it will do us no favours to expose the profit myth to anybody,even it has to be said...to the membership and you know I'm not one for pulling a fast one on the members but the angrier they are at the needless privatisation of a profitable company the better when it comes to filling in their ballot paper next week.