Royal Mail to invest around GBP1.8 billion in UK over five years

[POSTMAN]

https://www.royalmailgroup.com/en/press ... ive-years/" onclick="window.open(this.href);return false;

Royal Mail to invest around £1.8 billion in UK over five years

Second daily delivery of parcels to be introduced

More customer initiatives – collecting returns from consumers at home, in-flight redirections for individual parcels – to come

As part of its five-year strategic plan, announced today, Royal Mail is investing around £1.8 billion over five years in the UK’s postal service.

The c £1.8 billion investment programme will focus on customer service improvements, digital initiatives, network enhancements and new ways of working to deliver more productivity and efficiency. This initiative will help fund the UK’s Universal Service.

The planned investment brings to almost £4 billion the amount Royal Mail has invested in the UK since 2013, the year of its flotation, when it became one of the most widely-held FTSE stocks.

To support the delivery of its strategic goals, including the investment to transform the UK business, Royal Mail is rebasing the dividend and changing its dividend policy. This is not a decision taken lightly as we understand how important the dividend is to our shareholders. The Company has sought to find the appropriate balance between investing in the future sustainability of our business and shareholder returns. 1

As part of the plan, the Company is introducing a second delivery for parcels that will expand in line with demand and be fully operational by 2023.
This second delivery will consist of Next Day parcels, typically purchased online from retailers the evening before, and larger items more appropriate for van delivery. In many cases, the delivery will be less than 24 hours after the order is made.

Customers will continue to receive a delivery of letters and all other parcels earlier in the day via Royal Mail’s network of postmen and women.
The move comes at a pivotal time for UK online retail. Royal Mail’s analysis indicates that Next Day parcels are expected to significantly outpace growth in other delivery time categories. This initiative will help facilitate that growth.

Delivery in less than 24 hours is in tune with the “night owl” shopping phenomenon. Smartphone night shopping has increased by 33 per cent in just one year2. Almost 80 per cent of consumers value a retailer who offers late order acceptance3.

The separate processing and delivery of Next Day and larger items will generate a reduction for Royal Mail in the cost of handling parcels, including small items. It will make it easier for postmen and women to deliver their usual round as heavy, bulky items will no longer be in their mailbag.

As part of the move to a second daily delivery, three new fully-automated parcel hubs will be built, representing a significant investment in the regions in which they are located.

The Company has had preliminary discussions with the CWU and is committed to working collaboratively on the strategy, detailed design and deployment, including a trial for separate van delivery.

In another plan element, Royal Mail will collect returns from customers at their home, including both consumers making returns and small marketplace sellers fulfilling sales. Royal Mail will also offer a range of in-flight redirection options where consumers are not going to be at home when their parcel is scheduled to arrive.

The value of online returns is expected to increase by more than 27 per cent over the next five years4. Royal Mail has already announced this week that it will introduce 1,400 parcel postboxes across the UK over a six month period, starting in August 2019.

The Board is recommending a final dividend of 17.0 pence per share, giving a full year dividend of 25.0 pence per share for 2018-19, an increase of one pence per share, or four per cent.

It is then rebasing the dividend and changing the dividend policy. From 2019-20, the policy is for a full year dividend underpin of 15.0 pence per share, which may be supplemented by additional payouts in years with substantial excess cashflow. The dividend is expected to be covered by cumulative trading cashflows over both three and five years.

Our new dividend policy reflects the additional investment to turnaround and grow our UK business and expected lower cash generation in the early years of the plan.

[POSTMAN]

https://www.myroyalmail.com/news/2019/0 ... tegic-plan" onclick="window.open(this.href);return false;

Today we are announcing our five-year strategic plan for Royal Mail Group, including some of our ambitions on a three-year basis. We are also announcing our full year financial results for 2018-19.

Our ambition is to build a parcels-led, more balanced, more diversified international business. We will focus on three new strategic priorities.

‘Turnaround and grow’ in the UK
‘Scale up and grow’ GLS
Enhancing our cross-border proposition
At the heart of our refreshed strategy is a major transformation plan for Royal Mail in the UK. We plan to invest around £1.8bn in the UK over five years, bringing UK investment capital expenditure since 2013, the year we were privatised, to almost £4bn.

Colleague update...
https://www.myroyalmail.com/sites/defau ... 0FINAL.pdf" onclick="window.open(this.href);return false;

[k979aaa]

Trouble is most of it is going into shares.

[PostmanBitesDog]

[The Postman]

Guess they’ve just confirmed what we’ve all been saying for ages, Royal Mail is a parcel business that just happens to deliver letters in the uk. Is this them preparing for changes to the uso? Maybe getting rid of dsa, UKMail etc. can deliver their own letters? In-flight redirections was what I thought also, a ping sent to the pda to redirect a parcel elsewhere when there’s no-one home. And large parcels taken out of delivery, surely this isn’t a bad thing if jobs are relocated to parcel duties? They’re still going to take the same time to deliver.

[Celgar]

I know RM already has a fifty percent share of the UK parcels business but they have failed to get any more contracts for the LATs and they have failed as a concept. They could have propped them up by moving larger parcels from our main deliveries and just left it at that. But they have seen an opportunity for cost saving (Shedding jobs.) and so the plan is to shift the Tracked items to the LAT hubs as well. IF, and it's a big if, we manage to extract ourselves from the EU then I think we could cancel the DSA and pull out of the GDPR. That would just leave the UK government to stop abuse of the self employment status and enforce the minimum wage regulations more than they currently do. Then the playing field would be more equal and RM could stop attacking the posties.

[Celgar]

I don't think in-flight redirections will work like you suggest as the PDAs we take out on delivery don't have a list of parcels we are delivering stored on there. I was thinking in-flight redirections would be like the 'Local Collect' service where parcels get delivered to a local post office and are entered as such on the PDA.

[The Postman]

I don't think in-flight redirections will work like you suggest as the PDAs we take out on delivery don't have a list of parcels we are delivering stored on there. I was thinking in-flight redirections would be like the 'Local Collect' service where parcels get delivered to a local post office and are entered as such on the PDA.

There is indeed a route optimisation & planning app on our pda’s already. Also, I’ve changed delivery instructions with a parcel being delivered to me by dpd before, I got a delivery window in the morning and was able to let the driver know I wouldn’t be home and let him know where I wanted my parcel left. Once my parcel was delivered I got a confirmation message which contained a picture of the slip he put through the door and a picture of the parcel where he’d left it, just like our safeplace feature where you take a picture with the pda.