Broker views: General Election poll frenzy will deliver Royal Mail a 30million bonus

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Royal Mail could receive a £30million windfall from the General Election as the increasingly bitter battle between the political parties continues to escalate.

City broker Peel Hunt said the ‘volume boost’ for the company from electioneering mail and postal votes will come nicely ahead of the critical Christmas trading period when the firm employs around 18,000 casual workers to handle extra post.

It follows Royal Mail’s successful injunction of a strike led by the Communication Workers Union last week, preventing a damaging December walkout.

Last month, 100,000 Royal Mail staff were balloted and voted to take action over job security and terms. But Royal Mail argued the ballot had ‘potential irregularities’ and was null and void.

The CWU said the judgment was an ‘utter outrage’.

However, Peel Hunt analyst Alexander Paterson warned ‘strained relations’ with staff and the union were likely to continue to cause disruption.

‘We anticipate that the CWU will hold another ballot and will strike next year, albeit most likely with a vote in favour below the 97 per cent achieved in the October ballot,’ said Paterson.

He said that would be likely to make a cost savings target of as much as £200million look ‘extremely optimistic’.

Rico Back, the Royal Mail chief executive appointed last year, is battling an ongoing decline in letter volumes as customers and businesses opt for digital communication.

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