Royal Mail goes off message

[stephen500]

http://www.guardian.co.uk/commentisfree ... il-profits
Dan Roberts guardian.co.uk, Thursday 14 May 2009
"Amid all the doom and gloom, comes the news that the Royal Mail is actually a business that is doing pretty well.

At this rate, the last letter in Britain will be posted some time around 2025, the pension bill for thousands of redundant posties will be crippling the public finances and the government will be paying through the nose for a dwindling band of Post Office branches to remain open.

Extrapolate out trends in the mail industry, and the picture can easily look this alarming. But amid all the doom and gloom, comes the news that the Royal Mail is actually a business doing pretty well. Results out today show all four of its main divisions (letters, parcels, logistics and Post Offices) making money. In fact, operating profits total £321m – not bad on a day when BT (its pre-privatisation partner) recorded a pre-tax loss.

It is true that life is going to get tougher. Chief executive Adam Crozier reckons letter volumes are dropping by around 10% a year as the recession accelerates a long-term trend toward online alternatives. Like BT, Royal Mail is also having to pump more money into its struggling pension scheme – a liability that quickly eclipses the operating profit. But both Crozier and the postal unions are also doing their bit to pare back costs: some £250m in payroll cost has been taken out of the business as new technology improves efficiency rates.

Unfortunately, none of this fits the required script. In order to justify its controversial part-privatisation plan, the government needs to convince backbench rebels that this is a business in freefall: only an immediate injection of private capital and new management can save it. Instead, what we have is a business that looks like plenty of others in Britain: overburdened by liabilities, but struggling manfully to adapt to change. There is no room for complacency, but fewer reasons to throw away 360 years of public heritage either."

[norbert]

quite a lot of the payroll costs has gone into the likes of :lfo & :cfo ' and their Senior + Middle Manager's back pockets . Still :mfo knows where to go for another " loan "