The CWU and the 'Warchest' - explanation needed

[Woody Guthrie]

Again.
Jesus wept.

[postslippete]

The CWU are all over the place. They are using every means possible to get their members to vote yes - even though what they are saying clearly doesn't make any sense.


So I will clarify. Royal Mail is sitting on retained earnings of £3.8 billion and has access to £1.7 billion liquidity - regardless of whether or not they have an agreement. Put simply, there is money there.

The term war chest was was first used in an article written by a union bashing , right wing tory journalist in the Telegraph some time ago now.
He later admitted it was taken out of context and it was not correct. It followed an interview with the RM chairman. RM denied ever saying it. No company has £1.7bn just sitting in the bank . It's money it could access to invest provided the company is stable and in RMs case has an agreed business recovery plan. CWU and the TUC both latched onto the article to defend unions as a whole. It was an intimidation threat started by the right wing Tory gutter press.

Royal Mail have access to this liquidity regardless of whether the company is stable or not. The company certainly don't need a business recovery plan if it wants to sell a few of its £200 million shares that it bought as part of the share buyback in 2021.

All liquidity refers to is Royal Mails ability to cover its short term liabilities and that there is enough shares, mutual funds, securities and even cash (anything that is not "illiquid" basically) that can be used to 'quickly' pay off any immediate debts such as loans, wages, bills, taxes etc etc.

[clashcityrocker]

The company certainly don't need a business recovery plan if it wants to sell a few of its £200 million shares that it bought as part of the share buyback in 2021.

I thought the shares were cancelled?

[timbo1234]

The CWU are all over the place. They are using every means possible to get their members to vote yes - even though what they are saying clearly doesn't make any sense.


So I will clarify. Royal Mail is sitting on retained earnings of £3.8 billion and has access to £1.7 billion liquidity - regardless of whether or not they have an agreement. Put simply, there is money there.

The term war chest was was first used in an article written by a union bashing , right wing tory journalist in the Telegraph some time ago now.
He later admitted it was taken out of context and it was not correct. It followed an interview with the RM chairman. RM denied ever saying it. No company has £1.7bn just sitting in the bank . It's money it could access to invest provided the company is stable and in RMs case has an agreed business recovery plan. CWU and the TUC both latched onto the article to defend unions as a whole. It was an intimidation threat started by the right wing Tory gutter press.

Royal Mail have access to this liquidity regardless of whether the company is stable or not. The company certainly don't need a business recovery plan if it wants to sell a few of its £200 million shares that it bought as part of the share buyback in 2021.

All liquidity refers to is Royal Mails ability to cover its short term liabilities and that there is enough shares, mutual funds, securities and even cash (anything that is not "illiquid" basically) that can be used to 'quickly' pay off any immediate debts such as loans, wages, bills, taxes etc etc.

I dont think you understand the seriousness of RM'S problems. It might well need to sell shares but nobody would buy them. The reason is the company has no agreed plan with it's workforce to turn things around so it will continue to lose £1m per day. The financial markets want long term stability not just a short term cash injection which will solve nothing. The shares and other liquidity you talk about wouldn't last 3 months. Also by selling their shares to raise capital they will lose money on the share price.

[postslippete]

I dont think you understand the seriousness of RM'S problems.

The RM board are desperate for this agreement so that they can make even more profit in the future for their shareholders. Royal Mail has retained earnings of £3.8 billion and access to £1.7 billion liquidity. Don't gloss over this because it's really not going bust any time soon.

It might well need to sell shares but nobody would buy them.

When Royal Mail first floated on the stock exchange I actually tried to buy up £10k worth of shares. It was undervalued then and it is undervalued now. I can also tell you that when we were out on strike - the share price often went up. That is because when the share price drops our big investors (like Vesa Equity or Schroder or Blackrock) are buying up more shares - probably to reduce their cost basis. They are not going to sell their shares if they are undervalued; they are more likely to buy them.

The reason is the company has no agreed plan with it's workforce to turn things around so it will continue to lose £1m per day.

Losing a million pounds a day is a convenient 'soundbite' for the company to use and it has form for doing this in the past with Leighton and Crozier. We had a 2% imposed pay rise last year yet postage prices went up by 11%. The workforce actually had a reduction of 10,000 FTEs in 2021-22 and we are short staffed and are failing the USO on a daily basis due to revisions which have made walks bigger. We have also lost as many vans that have been de-commissioned. I very much doubt that we are losing a million quid a day right now. This negotiators agreement with the CWU is a potentially lucrative one for the company and that is why they agreed a profit share scheme in their 'best and final offer' last year.

The financial markets want long term stability not just a short term cash injection which will solve nothing.

You mean IDS want long term stability rather than just a short term cash injection?

The shares and other liquidity you talk about wouldn't last 3 months

You say the company is losing a million pounds a day - so how much will it lose in 3 months?? I think your maths is off if you think it's going to make a massive dent in £1.7 billion in available liquidity.

[Woody Guthrie]

Let's stop calling it available liquidity.
This isn't financial advisor chat.
It's debt.
Call it debt.

[Woody Guthrie]

If you really want to you can call it an overdraft facility.

I don't know what the terms are or how long before it needs to be paid back, all I know is it's somebody else's money and they'll want to see a decent return especially with interest rates travelling upwards.

[LouBarlow]

Losing a million pounds a day is a convenient 'soundbite' for the company to use and it has form for doing this in the past with Leighton and Crozier.

Is it though? What were the reported financials posted back in May? Divide those losses by 365 and see what figure you arrive at.

[timbo1234]

If you really want to you can call it an overdraft facility.

I don't know what the terms are or how long before it needs to be paid back, all I know is it's somebody else's money and they'll want to see a decent return especially with interest rates travelling upwards.

Absolutely correct. The most important aspect is the ability to repay any loans. No company is too big to fail but there is still the widely held belief that RM are exaggerating the situation and if it is a NO vote then it carries on as normal. I think that is somewhat naieve in the extreme but we shall see.

[postslippete]

Losing a million pounds a day is a convenient 'soundbite' for the company to use and it has form for doing this in the past with Leighton and Crozier.

Is it though? What were the reported financials posted back in May? Divide those losses by 365 and see what figure you arrive at.

You forgot the £1 billion in profits squandered by shareholders during the pandemic?

The financial results were as black as they could possibly be and everyone knows why.

[Acca Dacca]

Let's stop calling it available liquidity.
This isn't financial advisor chat.
It's debt.
Call it debt.

You dont have a problem with the CWU still calling it a warchest though?

[postslippete]

If you really want to you can call it an overdraft facility.

I don't know what the terms are or how long before it needs to be paid back, all I know is it's somebody else's money and they'll want to see a decent return especially with interest rates travelling upwards.

All you need to be aware of woody is that the only people who benefit from any "modernisation" in our company are big shareholders and greedy overpaid bosses.

[LouBarlow]

Losing a million pounds a day is a convenient 'soundbite' for the company to use and it has form for doing this in the past with Leighton and Crozier.

Is it though? What were the reported financials posted back in May? Divide those losses by 365 and see what figure you arrive at.

You forgot the £1 billion in profits squandered by shareholders during the pandemic?

The financial results were as black as they could possibly be and everyone knows why.

If I had a Time Machine and could go back in time and tell them it was a bad idea, I would. Doesn’t help us out of our current situation though.

[richietns]

If you really want to you can call it an overdraft facility.

I don't know what the terms are or how long before it needs to be paid back, all I know is it's somebody else's money and they'll want to see a decent return especially with interest rates travelling upwards.

All you need to be aware of woody is that the only people who benefit from any "modernisation" in our company are big shareholders and greedy overpaid bosses.

Its privitised..do you really think they care about what we think..if the bosses are overpaid or the shareholders are milking it..privitisation is just legal modern day piracy.

[postslippete]

If I had a Time Machine and could go back in time and tell them it was a bad idea, I would. Doesn’t help us out of our current situation though.

They wouldn't listen to you Lou because you're not a financial guy

Those investors are in it for the long haul anyway. They might not receive a handsome 7% dividend this year but the company has looked after them with any profits that we make.

If the company can resolve this dispute imho it can be really profitable. They have seen how GLS work and they would like us to be a similar model. Some of us won't accept that and will probably jump if we are not pushed first.