Royal Mail Full-Year Profit Rises 26% on Cuts, Modernization

[TrueBlueTerrier]

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May 20 (Bloomberg) -- Royal Mail Group Ltd., the U.K.’s state-owned postal carrier, for which the government said today it’s seeking private capital, said full-year profit rose 26 percent as it cut jobs and invested in technology.

Operating profit in the 2009-10 fiscal year rose by 83 million pounds ($119 million) to 404 million pounds, the London- based company said in an e-mailed statement today. Revenue dipped for the first time in a decade, falling 2.2 percent to 9.35 billion pounds.

Royal Mail has invested 1.6 billion pounds in modernization plans since 2006, as traditional mail markets decline globally. More than 13 million fewer letters a day were handled in the year than five years ago, as people have come to rely more on Internet and text messaging.

“These are good results achieved against a backdrop of harsh economic conditions and the relentless reduction in the number of letters sent by customers, not just in the U.K. but around the world,” Chairman Donald Brydon said in the statement. “However, huge challenges remain, including the need to find a resolution to our historic pension deficit.”

That deficit is “expected to be significantly higher than the previous figure of 3.4 billion pounds when the current valuation is completed,” the company said in the statement. In December, the London-based Times said Royal Mail would probably report a pension-fund deficit of more than 10 billion pounds.

Headcount was reduced by almost 8,000, with no compulsory redundancies, the company said today. Strikes last year by Communications Workers Union members “clearly had an adverse effect on Royal Mail Letters,” Brydon said in the statement.

Private Capital

The U.K. coalition government said today it will seek to bring private capital into Royal Mail, including opportunities for employee ownership.

“We will retain Post Office Ltd. in public ownership,” the government said in its coalition agreement today.

“This is old politics wrapped in new language,” CWU General Secretary Billy Hayes said in an e-mailed statement. “The British public has consistently rejected the privatization of Royal Mail. The move to regurgitate failed policies will be deeply unpopular.”

Former U.K. Business Secretary Peter Mandelson abandoned efforts last year to find a partner for Royal Mail, saying market conditions had made it impossible to do so on the right terms for the taxpayer.

[fishtank]

“This is old politics wrapped in new language,” CWU General Secretary Billy Hayes said in an e-mailed statement. “The British public has consistently rejected the privatization of Royal Mail. The move to regurgitate failed policies will be deeply unpopular.”

Go on Billy,that's telling them.......in an angry e-mail.

[tragictramp]

as an employee i think i might buy royal mail with my £400 pro rata i got actually 255 quid.

[Patrick Clifton]

Another increase on profits and posties throughout the country face pay cuts

[Big Daz]

“This is old politics wrapped in new language,” CWU General Secretary Billy Hayes said in an e-mailed statement. “The British public has consistently rejected the privatization of Royal Mail. The move to regurgitate failed policies will be deeply unpopular.”

Billy , you have failed to spot the error in your statement, 59% of the public voted for a party that wants either full or partial sell off.

The coalition government have a mandate for the sell off some thing the previous government did not have. They also will enjoy the support of their backbenchers, again the previous government did not have that.

Billy,Dave and NEC need their thinking caps on for this one.

[smokerjim]

“This is old politics wrapped in new language,” CWU General Secretary Billy Hayes said in an e-mailed statement. “The British public has consistently rejected the privatization of Royal Mail. The move to regurgitate failed policies will be deeply unpopular.”

Billy , you have failed to spot the error in your statement, 59% of the public voted for a party that wants either full or partial sell off.

The coalition government have a mandate for the sell off some thing the previous government did not have. They also will enjoy the support of their backbenchers, again the previous government did not have that.

Billy,Dave and NEC need their thinking caps on for this one.

We're screwed

[mjw]

Pensions are a red herring, no matter what the company does it can never fill the hole, it is privatisation for political reasons and the pension fund is a fecking good excuse to do it. By the way why hasn't been done to fix the hole by increasing our contributions? I wouldn't object to increasing my contribution.

[Patrick Clifton]

Pensions are a red herring, no matter what the company does it can never fill the hole, it is privatisation for political reasons and the pension fund is a fecking good excuse to do it. By the way why hasn't been done to fix the hole by increasing our contributions? I wouldn't object to increasing my contribution.

Surely that would be a double edged sword?! More money at the moment will maybe start to plug the gap, but in the future when they have to pay out on that increased contributions, the money will need to be found from somewhere for that.

[POSTMAN]

Some of it obviously is due to the recession,but a large part of it is because of the holiday,so they can go f**k themselves on that part.