Royal Mail owner IDS to confirm losses as union talks continue

[TrueBlueTerrier]

https://www.proactiveinvestors.co.uk/co ... 98100.html

Royal Mail owner International Distributions Services PLC (LSE:IDS) will report half-year result on the coming Thursday amid a continued uncomfortable atmosphere for investors, management and workers.

Despite sector peers reporting strong market dynamics, a big focus for the FTSE 250-listed group will be on any updates on the impact strikes are having on business performance, with progress (if there is any) on negotiations likely to be made public before the results.

Although talks between the company and its main union on pay and work conditions at the ACAS arbitration service are ongoing, the Communication Workers Union (CWU) earlier this month called two 48-hour strikes after receiving what it called a “derisory” 7% pay offer.

Having withdrawn the threat of strikes as it agreed to meet with management last week to try and find a deal, the CWU served legal notice on the group a week ahead of the trading update, with national strike action inked in for key shopping days in the run up to Christmas.

The pay offer was described as a “dramatic real-terms pay cut”, with inflation having topped 10% this year and up more than 13% on a two-year basis, with the union also railing against proposals to introduce “Uber-style owner-drivers, mail centre closures and changes to Sunday working”, similar to Hermes and GLS.

Royal Mail said its proposed pay-for-change offer was worth 9% over two years and emphasised that it was doing this despite expecting to make a loss of £219mln in the first half of the year. The cash outflow in the first half from Royal Mail was also put at £274mln.

For the full year, losses are expected to be around £350mln, which includes the impact of eight days of industrial action, which is more than have been held so far.

“The reality may well be worse,” said analyst Matt Britzman at Hargreaves Lansdown.

In its last trading update in October, parent company IDS said three days of industrial action in the six-month period had cost the business £70mln, leading it to threaten that 10,000 job cuts would be necessary over a year.

Analysts pointed out that a larger portion of the losses, £149mln, was due to the lack of efficiency improvements at the company.

There was also a not-so-veiled warning that the profitable Global Logistics Services (GLS) operation, which is based in Amsterdam, could go it alone.

“In the event that significant change within Royal Mail is not achieved, all options remain open to protect the value and prospects of the group, including separation of the two companies.”

GLS, meanwhile, was said to be on track to deliver an operating profit of £320mln-£354mln.

Also worth bearing in mind, Czech billionaire Daniel Kretinsky's company, Vesa Equity Investment, was given permission by the government to increase its stake in IDS from the current 22% up to 25%.

Any increase in Kretinsky's stake would prompt him to notify the stock exchange, while if he went above 30% he would have to make a full bid.

[guardianangel]

Technically over the year they would of made £50 million if they didn't give away £400 million,that's not the workers fault,sack the board,its not the workers collapsing this company.

[clashcityrocker]

Technically over the year they would of made £50 million if they didn't give away £400 million,that's not the workers fault,sack the board,its not the workers collapsing this company.

That assumes all £400 million came from RM and not from the group profits.
GLS, meanwhile, was said to be on track to deliver an operating profit of £320mln-£354mln.

[plymouth3]

£400 was from previous year was from good covid results not this year, however what did we get for working in covid

[Surreypostie]

I can't read anything with IDS in the title and not think Ian Duncan Smith and that is enough to make me feel ill.