RM delivers second-class profits

[TrueBlueTerrier]

http://www.inthenews.co.uk/money/united ... 159447.htm

A failure to modernise and an increase in pension fund costs are among the reasons for Royal Mail's (RM) £122 million fall in annual profits, the group has said.

Announcing its results for the year ending March 25th 2007, RM blamed a "significant increase" in pension costs of £193 million for overall profits slipping to £233 million in 2006/07.

The company, which was forced to rely heavily on its European operations and government funding, said it would have to raise its retirement age from 60 to 65 as part of a series of measures revising its pensions scheme.

It said it was 40 per cent less efficient than its rivals and was suffering from a declining market, making it imperative that it modernise and improve its performance.

"Looking to the future, if we are to continue on our journey to become the world's best and most trusted postal service we must now take action to meet the challenges of securing a viable pension scheme for our people, dealing with the impact of both substantially increased competition and falling mail volumes, and building a long term sustainable post office network," a joint statement from chairman Allan Leighton and chief executive Adam Crozier said.

"We continue to make progress with much-needed changes to our operations, but we must move faster and further and we know the importance of bringing our people with us as we transform the company."

The first months of RM's 2007/08 financial year, which have seen crippling strikes affect its UK operations as workers oppose the proposed changes, appear to show little respite for RM's bosses.

In the five months to August revenues in the letters business fell by £78 million when compared with figures in the same period last yea

[KawasakiKid]

:cfo :lfo "Looking to the future, if we are to continue on our journey to become the world's best and most trusted postal service ---------We were the best and most trusted postal service in the world, but these two D**ckheads are putting a stop to that!!!!!!!!! We,ve had the same bunch of casuals in our DO for three weeks now, I asked one if they had applied to stay on with the company. Anyone like to guess the reply???????????????----------------------

[moanmoanmoan]

£233.000.000 in a year and thats a POOR result am i missing something again, despite our pair of fools raking off a couple of mill in pay and bonuses for themselves, starting to pay back the billions that they owe the pension to the tune of 193.000.000 that they and the goverment stole from the pension pot by not paying their share in the first place. Tens of millions of pounds in inflated wages and bonuses for 90% underworked and 50% overpaid Directors and Managers. And an agreement that our CEO made were we lose money on every downstream letter we handle and cant even compete with because that same arse that deal said we would charge at least 2p an item more than our rivals. What other service makes that kind of cash? None and if the goverment put someone in charge who could run the company properly how much would it make then? Is this Goverment stupid or what? RM well run is a cow that they could milk for ever instead of destroying it and giving it to the city for the fat cats to make a fast quid.

:lfo :cfo

I agree totally with some of you points here:

However the profit figure is somwhat misleading - sure £233million is a lot of money but when the invested capital and turnover is considered it is poor- but this is a service not a cash cow -profit should not be the key driver.

Which prat decided that opening up the postal market should entail RM doing what they have always done(delivered letters) but as opposed to keeping all the revenue themselves they do it for someone else for less money?

As for being unable to compete with the competition - when RM is doing the deliveries!!!
What a quality CEO to agree a deal that means you cant compete when you are doing the work anyway!!

For wisdom like this the prat in question is handsomly rewarded .

Profits are down, volumes are down - surley the senior management team should expected their bonusues to reflect this trend - but no - up they go.

Heads should roll higher up the political tree for this one.

If all the DHL etc had been kept out of the equation - or at least forced to pay market rates then RM would be awash with cash to pay for the shortfall in pension contributions over the years.

What adds even more insult to the situation is the sob stories in the press from Leighton.

A bleak picture is painted - WELL REVIEW YOUR F***ING BONUS PAYMENTS THEN.

A competent management team would have RM printing money to the benefit off all.

RM essentially have a monopoloy on door to door delivery of small mail items - the current management can not make good returns due to agreements that they have made in a monopoly. Mr leighton then comments that RM is lucky to have Mr Crozier in its employment. From his background in another monopoly(the FA). Something is seriously wrong when a monopoly that is used by 99%+ in a wealthy country of 60 million people can't make a decent living and reward it's staff with fair terms and conditions.

[pinstripe]

Is it just me, or am I wrong, but a few months ago when RM announced their results to Postcomm, they said they had made a LOSS of £12m. This was when we were striking and was used by RM management, remember there's no more money, then they gave the managers £40m odd in bonuses. Now they have actually made £200m+ profit. Which figure do we believe? None of them, in my opinion, they can't stop themselves from lying.

[jemima]

They aren't lying. They think both those things are true. That's how doublethink works.