Watchdog fears Royal Mail slump could affect services

Post by **postareale** » 02 Dec 2018, 22:15

https://www.telegraph.co.uk/business/20 ... -services/

Watchdog fears Royal Mail slump could affect services
Jack Torrance
1 DECEMBER 2018 • 6:46PM

The communications watchdog has warned that Royal Mail’s financial travails could threaten the sustainability of the universal postal service as new boss Rico Back struggles to get the privatised delivery firm back on track.

Ofcom, which monitors Royal Mail’s ability to meet its legal obligation to deliver letters and parcels to the whole country six days a week for a fixed fee, has sounded the alarm after the company issued a profit warning in October, knocking more than £1bn off its stock market value.

In a report last week the regulator said, while it expects the universal service to “remain financially sustainable in the immediate future”, it was worried about Royal Mail’s failure to keep up with its productivity targets.

The report said: “Given our view in previous years was that continued progress on efficiency was likely to … help ensure the financial sustainability of the universal service, this is a concern for us.”

It also raised concerns about Royal Mail’s pre-tax earnings, which slipped from 4.6pc to 4.4pc last year, below the 5pc to 10pc range that Ofcom sees as reasonable to keep the universal service sustainable.

The report adds to the pile of troubles faced by Mr Back as he bids to balance the company’s booming overseas parcel business with its heavily regulated home market.

Royal Mail’s shares have fallen 30pc since the start of the year and recently slipped below 330p, the price they floated at when it was nationalised five years ago. A spokesman said: “Royal Mail is working closely with Ofcom to provide a deeper insight into our performance plans. We have put in place a range of actions to improve our performance.”

Post by **rambo1** » 03 Dec 2018, 10:56

postareale wrote:https://www.telegraph.co.uk/business/20 ... -services/

Watchdog fears Royal Mail slump could affect services
Jack Torrance
1 DECEMBER 2018 • 6:46PM

The communications watchdog has warned that Royal Mail’s financial travails could threaten the sustainability of the universal postal service as new boss Rico Back struggles to get the privatised delivery firm back on track.

Ofcom, which monitors Royal Mail’s ability to meet its legal obligation to deliver letters and parcels to the whole country six days a week for a fixed fee, has sounded the alarm after the company issued a profit warning in October, knocking more than £1bn off its stock market value.

In a report last week the regulator said, while it expects the universal service to “remain financially sustainable in the immediate future”, it was worried about Royal Mail’s failure to keep up with its productivity targets.

The report said: “Given our view in previous years was that continued progress on efficiency was likely to … help ensure the financial sustainability of the universal service, this is a concern for us.”

It also raised concerns about Royal Mail’s pre-tax earnings, which slipped from 4.6pc to 4.4pc last year, below the 5pc to 10pc range that Ofcom sees as reasonable to keep the universal service sustainable.

The report adds to the pile of troubles faced by Mr Back as he bids to balance the company’s booming overseas parcel business with its heavily regulated home market.

Royal Mail’s shares have fallen 30pc since the start of the year and recently slipped below 330p, the price they floated at when it was nationalised five years ago. A spokesman said: “Royal Mail is working closely with Ofcom to provide a deeper insight into our performance plans. We have put in place a range of actions to improve our performance.”

1st cracks appearing in the USO? Is that what all this negative talk and profit warnings are about, to try relax the USO, get to a five day Mon to Friday for letter delivery, or even less, and axe 1/6th of the staff? Wages are a massive cost to RMG, one days overtime nationally, at this time of year, costs about £2.5million. just one day, just the overtime.

deezo · Post by **deezo** » 03 Dec 2018, 16:11

And so it begins....!

meako · Post by **meako** » 03 Dec 2018, 16:26

if the USO is indeed reduced to 5 days then its a no brainer that 1/6th of the delivery work force would not be needed and the union would be unable to defend this.

worktotime · Post by **worktotime** » 03 Dec 2018, 20:42

this is what the company always wanted , and massive job losses will come off this .

Post by **Navalron** » 04 Dec 2018, 11:44

Bollocks. The regulator has the power to change the USO but has to wait until 2022. They have put EVERYTHING in RMs way, to stop them making bigger profits by introducing, COMPETITION, that is fixed and flawed. There is NO COMPETITION to RM. All other companies do is take work from our collection drivers and hand it to RM. They make the profit by paying their driver minimum wage/self employed and the ones who did try and deliver mail failed miserably. This was always going to be the case and it quite hasn't worked out as the regulator/government thought it would and now they need to bullshit somemore. I don't believe that RM do want to lose the USO but I believe that they want paying from government for doing so as the old way of being subsidised by all other mail cannot last. But pretty soon after 2022 the post in Britain will be EVERY OTHER DAY, meaning half of your will be going. Basically it's the rich screwing the working classes get again but get again we bend over and take it. We can slay of the French for fun but they don't take any s**t....