International Distributi... Share Discussion Threads

[isis] 02/12/2022 14:37

Virtually all the strikes are by Public Sector and ex Public Sector. Just shows what a mess it all is.

[careful] 02/12/2022 14:27

Too much politics.

I doubt that HMG would like to re nationalise Royal Mail.
Why would any party want to take over an overstaffed, loss making business in decline?

Over 100,000 posties would rejoice because they dream they would have job security and fat pay packets for life.
Even if they had hardly any letters to deliver.

The public sector is already too big at the moment and needs to be sorted.

[cwa1] 02/12/2022 11:32

Never rains but it pours...

Dec 2 - Royal Mail had failed to meet its
delivery targets for 2021-2022 due to the pandemic, Britain's
communications watchdog Ofcom concluded on Friday, but warned
the post and parcel services company that it cannot use COVID as
an excuse anymore.


The regulator, which launched its probe in May, said Royal
Mail, owned by International Distributions Services Plc
IDSI.L , was not in breach of its regulatory obligations for
the period.


However, Royal Mail's performance so far into the 2022-23
period was "falling well short of where it should be", Ofcom
added.
"Our focus remains to restore our service to the high
standards our customers expect to receive," a Royal Mail
spokesperson said in an emailed statement.


The findings come as the more-than-500-year-old company is
under pressure to settle a damaging dispute with its largest
labour union over pay and other work policies, warning of severe
losses and job cuts if the strike action is not called off.
"Looking back at last year, COVID-19 was clearly still
having a significant impact on Royal Mail's operations," Lindsey
Fussell, Ofcom's group director for networks and communications,
said in a statement.
"However, the company's had plenty of time to learn lessons
from the pandemic, and cannot continue to use it as an excuse,"
Fussell added.


The regulator also said it would closely watch Royal Mail's
performance for the rest of the year.

[yieldmonkey] 01/12/2022 17:50

@careful the thing is it not really a fully private business!

The private bits have what is in effect a highly regulated, loss-making public monopoly millstone tied round its neck.

And IMHO ridding itself of this millstone is not going to be easy as there are a lot of powerful parties involved, not least poor old jonny taxpayer!

[encarter] 01/12/2022 14:31

I think RM and CWU are on the same page. They would both like the loss making side of the business back in government hands. The more the UK side of the business is destroyed the better for all except the tax payer. There is no way for RM to compete with the likes of Hermes. It is impossible without being subsidised.

[mikecoster] 01/12/2022 12:58

I'd argue that the workforce earn that figure while shareholders sit and wait for money to come in.

[careful] 01/12/2022 10:11

This argument from the CWU that shareholders get fat dividends and the posties get nothing.
How ignorant is that?

The workforce get paid most of the £12bn turnover in pay and benefits. Their rewards are huge compared to those of shareholders.

We the shareholders have made a terrible investment here, on balance we lose money, depending on the price we paid.
We do own the business, it is private company. Something that the CWU do not understand.

[tuftymatt] 01/12/2022 10:09

In very simple terms I think the major shareholders see GLS as the asset they would profit from. The rest of the asset's ( UK property etc etc ) would be given up. To me that would mean more than 300p a share would come our way but not the full NAV.

[yieldmonkey] 01/12/2022 09:57

The RM is well aware of what other national postal services are doing all over the world where the structural issues are the same. Alas they are unable to do most of these things due to the straight jacket of the unions on one hand and Ofcom on the other.

There are two things that concerns me about the current narrative - that the sum of the parts is worth well in excess of the current share price and when these business are hived off, s/holders will reap the benefit.....

1)RM does not exist in a political vacuum, quite the opposite. If you read the Postal Act and Ofcoms terms of reference, reports etc you will see that its clear that they have a legal duty to intervene if the UPO is threatened, although it is not entirely clear what forms such interventions would take. I think there would be a huge political storm if the government was left carry the financial hit for a failed RM rump business a year or two after the s/holders have pocketed the GLS/Parcelforce disposal proceeds. I am sure Ofcom and the Government is well aware of this.

2) The other factor in my mind is the banking group. As you know RM has a large and increasing level of debt and the facilities will be secured against the companies assets and contain xDefault, MAC and other clauses. From my banking days, there is no way in a million years that we would have allowed a company to hive off its two key assets and distribute the cash without paying down the debt. Would clearly be a potential trigger of the MAC clause as well as other key ratio covenants and get everyone around the table to avoid this being called.

[casholaa] 30/11/2022 21:32

I also think that if the posties didn't allow the union to dip its beak into their wages, they'd have more money in their pockets.

[casholaa] 30/11/2022 18:22

Check out ceefax/red button London news, the posties are affecting people already.

[lefrene] 30/11/2022 16:37

Cashola, without the workers there simply wouldn't be a business. It's the usual story of those actually doing the hard grind are way down the list of who gets the rewards. But yes, going on strike is only going to damage the company and play into the hands of the major shareholders who will want to dump the very badly run Royal Mail arm of the business. Setting up IDS lays the ground plan for a break up. Simply let RM go bust, that will allow the conditions for the thing to be re-formed into a proper business. No more being forced to carry other operators mail for the 'last mile' at a loss, no more daily deliveries or collections from remote locations. No weekend deliveries or collections except at a premium that compensates for the costs involved. There could be a huge reduction in the labour force and vehicle fleet, and mileage. It's not rocket science, it's the politics that get in the way.

RM could be a good business, but first the misguided and manipulated workforce will have to drive it bankrupt, so that it can start to be run as an actual business.

[isis] 30/11/2022 16:26

I have tried to talking to Posties and they get free enterprise at all and start get violent about so I will leave it with them.
They do no care or understand Free Markets as it suits their purpose. It is unfortunate the ugly head of inflation has brought all the strikers out again and it will have to play through. They do not see that high wage increases leads to inflation spiral - same as the 70's.

[casholaa] 30/11/2022 16:02

I see it a bit like this: The workers actually cost or lose the company money, they don't bring any money into the business, yet they want the profits.

[nakedmolerat] 30/11/2022 16:00

There is a lot of missing information spread about Royal Mail. I saw one post for example saying 2 billion was paid out to share holders and no rises for workers. Well that was incorrect as the 2 billion was dividends over several years. It's all spread by the CWU and the left, all they doing long term is doing the posties out of a job

[isis] 30/11/2022 11:45

logonair - too much power, they are not running the business hence they are all loss making. Okay in theory but has never works in practice, many of the conditions are archaic and prohibitive to progress in these days.
Simply put people aren't sending that many letters, I reckon I send less than five other than Cards per year!

[casholaa] 30/11/2022 11:40

Ahhh but you see, the people that do quite well out of RM are the management and shareholders which aren't likely members of the union. The penny never seems to droop let alone drop for the workers though.

[loganair] 30/11/2022 11:26

isis - Because these workers usually belong to Unions and have extremely good working conditions they are desperate to defend whereas many who work in the private sector do not.

[isis] 30/11/2022 10:31

I'm not aware of any other Private or Listed Companies having strikes. All the strike action is by Government paid employees or ex Nationalised Industries.
They do not or want to understand that they are part of the Inflation problem which will take longer to get a grip on.

[loganair] 30/11/2022 10:25

Often many of the large share holders in these companies are pension companies and rely on dividends to pay the pensioners.

Nationalisation doesn't work as all that happens is the said company becomes bloated with management and staff and becomes increasingly inefficient.

If one goes back to the 1980's, British Coal, BA, British Leyland, British Steel, British Rail etc, in todays money the Government subsidy would come in at Circa £50 billion.

[isis] 30/11/2022 10:14

All the Posties I've met are very difficult to reason with and very militant when it comes to work. Egged on by the Militant CWU it isn't a good picture.
All they go om about are what the Management get paid and what the Shareholders get in dividends and nothing about the business making profits and losses. A true anachronism from the bad old Nationalised days.

[tuftymatt] 30/11/2022 10:05

Yeah next year GLS will be sold off and the UK side of things taken back by the government in my opinion. GLS is worth more than the current PPS so shareholders can come out well compared to current levels which is why I think the biggest holders are increasing their positions.

Shame as I would sooner it stayed intact but if they can't work out a solution it will be broken up for sure in 2023.

[loganair] 30/11/2022 10:02

By changing name to International Distribution it seems to me Royal Mail want to rid themselves of the UK domestic letter and parcel services as they are at best not profitable and in many cases loss making.

By striking the Royal Mail workers are destroying the company they are working for, making it necessary to bring in more digitalisation therefore meaning less workers are needed.

I understand that M&S are no longer going to use Royal Mail and moving over to Hermes. M&S send circa 35,000 packages a day via Royal Mail.

The only way forward I can see is for the UK Domestic letter and parcel services to be renationalised as a Public Service.

[coxsmn] 30/11/2022 10:00

Strikes could result in the permanant loss of business to competitors