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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Royal Mail Plc | LSE:RMG | London | Ordinary Share | GB00BDVZYZ77 | Royal Mail Plc |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 207.00 | 206.00 | 206.30 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMRMG
RNS Number : 3255C
Royal Mail PLC
14 June 2019
Royal Mail plc (Incorporated in England and Wales) Company Number: 8680755 LSE Share Code: RMG ISIN: GB00BDVZYZ77 LEI: 213800TCZZU84G8Z2M70
Publication of Annual Report and Financial Statements 2018-19 and 2019 Notice of Annual General Meeting
Following the release by Royal Mail plc (the Company) on 22 May 2019 of the Company's Financial Report for the Full Year Ended 31 March 2019 announcement, the Company announces that it has today published its Annual Report and Financial Statements 2018-19 (Annual Report 2018-19) on Royal Mail's website: https://www.royalmailgroup.com/investors/annual-reports/
The 2019 Annual General Meeting (AGM) will be held on Thursday 18 July 2019 at 11.00am at the Mercure Exeter Rougemont Hotel, Queen Street, Exeter, EX4 3SP. The 2019 Notice of AGM has also been published and is now available via Royal Mail's website:
https://www.royalmailgroup.com/investors/annual-general-meetings/
In accordance with Listing Rule 9.6.1, copies of the Annual Report 2018-19, Notice of AGM and Proxy Form have been submitted to the National Storage Mechanism and will shortly be available for inspection at: www.morningstar.co.uk/uk/NSM
The Company also announces that it will provide shareholders, by their chosen communication means, the above documents.
Change to Financial Calendar
The Financial Calendar on page 231 of the Annual Report 2018-19 should read as follows:
Hot Features
Premium
Annual General Meeting and trading 18 July 2019
update(1)
Ex-dividend date 25 July 2019
-----------------
Final Dividend Record date 26 July 2019
-----------------
Final Dividend Payment date 4 September 2019
-----------------
(1) A trading update will be provided at the Annual General Meeting. Going forward we will not be providing detailed operating results in respect of the first three months of each financial year.
Disclosures required in accordance with DTR 6.3.5
Information on important events that have occurred during the financial year and their impact on the Annual Report 2018-19 were included in the Financial Report for the Full Year Ended 31 March 2019 announcement released on 22 May 2019. This, together with the following information, which is extracted from the Financial report for the full year ended 31 March 2019 (Financial Report) and the Annual Report 2018-19, constitutes the information required by DTR 6.3.5 to be communicated in full, unedited text through a regulatory information service. This information is not a substitute for reading the full Annual Report 2018-19. Any page or note references in the text below refer to those in the Annual Report 2018-19.
For further information, please contact:
Company Secretariat:
Mark Amsden
Phone: 020 7449 8289
Email: cosec@royalmail.com
Investor Relations:
Catherine Nash
Phone: 020 7449 8183
Email: investorrelations@royalmail.com
Media Relations:
Beth Longcroft
Phone: 07435 768 549
Email: beth.longcroft@royalmail.com
PRINCIPAL RISKS
The Governance section describes in detail how the Group manages its risk from the Group Board level, its respective sub-committees and throughout the organisation. Further details can be found on pages 64-72.
The table below details each principal business risk, those aspects that would be impacted were the risk to materialise, our assessment of the status of the risk and how the Group mitigates it.
Principle risk Status How we are mitigating
the risk
Pensions, Pay and Pipeline Agreement and the risk of industrial
action
There is extensive trade union recognition in respect of our
workforce in the UK, with a strong and active trade union. As
Royal Mail Group continues to transform in order to remain competitive
in the letters and parcels markets, including delivering its
'turnaround and grow' plan in the UK, there remains a risk of
industrial action.
Industrial action
---------------------------------- --------------------------------- ----------------------------------
There is a risk that The Agenda for Growth Our Agenda for Growth
one or more material agreement developed agreement with the
disagreements or disputes jointly with the Communication CWU provides a joint
between the Group and Workers Union (CWU) commitment to improved
its trade unions could represented a fundamental industrial relations
result in widespread change in our relationship and to resolving disputes
localised or national with the CWU, and continues at pace in a way that
industrial action. to promote stability is beneficial to both
in industrial relations. employees and Royal
The absence of major Mail.
industrial action is In February 2018, following
a key assumption underpinning an industrial dispute Our transformation
the 'turnaround and late in 2017, we announced plan will be carefully
grow' plan in the UK. the Pensions, Pay and sequenced, with a foundation
But, the plan requires Pipeline Agreement period, including parcels
a high level of operational (the '2018 Agreement') automation in all our
change in an increasingly with the CWU, which existing Mail Centres,
competitive market, the union membership followed by the embedding
which may put additional subsequently ratified. of the new work tools
strain on the stability As part of the Agreement, across our UK operations
of our industrial relations. Royal Mail and the and the deployment
CWU committed to a of a new network design.
Widespread localised broad programme of We have informed our
or national industrial operational change, unions about our plan.
action would cause as well as pension We will work closely
material disruption reform, changes to with them on strategy,
to our business in pay and terms and conditions. detailed design and
the UK and would be deployment. We are
likely to result in The after effects of committed to working
an immediate and potentially the industrial dispute, corroboratively through
ongoing significant delayed implementation these changes - including
loss of revenue for of cost avoidance projects new ways of working
the Group. It may also and the complexity new trials and more
cause Royal Mail to involved in implementing flexibility - with
fail to meet the Quality elements of the Agreement them.
of Service targets contributed to our
prescribed by Ofcom, announcement in October Under the Agenda for
which may lead to enforcement 2018 that we would Growth, there is a
action and fines. not deliver our productivity prescribed resolution
and cost avoidance process for disputes
targets for 2018-19. which requires trained
mediators nominated
Subsequent analysis by and representing
of the productivity both the CWU and the
and efficiency opportunities business. This must
under the 2018 Agreement be followed before
found that a step change any industrial action
was required in the can take place. The
form of a new transformation Agenda for Growth agreement
plan to fund the overall has legally binding
cost of the Agreement protections for the
to the Company. While workforce in respect
the overall operational of future job security
direction set out in and our employment
the Agreement is right model. These can be
the review found that rescinded in a number
the initiatives so of circumstances, including
far designed to fund in the event of national
it were not enough industrial action.
in themselves to do
so; nor were they all
at the appropriate
stage of readiness.
Hence, the need for
a new transformation
plan.
--------------------------------- ----------------------------------
Pension arrangements
---------------------------------- --------------------------------- ----------------------------------
We recognise that pension -The Royal Mail Pension We are continuing to
benefits are important Plan closed to future work with Government
to our people and that accrual in its Defined to make the necessary
we need to continue Benefit form on 31 legislative and regulatory
to provide sustainable March 2018. A new Defined changes required to
and affordable pensions Benefit Cash Balance introduce the CDC pension
arrangements that are Scheme was put in place scheme.
acceptable to our people from 1 April 2018.
and unions.
The overall ongoing
There is a risk that cash cost of both the
we may be unable to transitional arrangements
obtain the necessary and the proposed CDC
legislative changes scheme are expected
to enable us to implement to continue to be around
the UK's first Collective GBP400 million per
Defined Contribution annum.
(CDC) pension scheme
as agreed with the The Government has
CWU. published its response
to the consultation
on CDC pension schemes.
It has committed to
bringing forward necessary
legislative changes
to enable CDC pensions
as soon as Parliamentary
time allows.
--------------------------------- ----------------------------------
Efficiency
---------------------------------- --------------------------------- ----------------------------------
Royal Mail must become In recent years, the Our 'turnaround and
more efficient and profits generated by grow' programme in
flexible in order to our UK business have the UK is about a renewed
compete effectively been in decline and focus on our efficiency
in the parcel and letter our costs have increased. and productivity and
markets. Our productivity has our UK network through
slowed appreciably a range of digitally
The success of our due to the absence enabled work tools
strategy relies on of both new working and targeted investments.
the effective control tools and network enhancements. Operational excellence
of costs across all is another key feature
areas of the business The 'turnaround and of the plan.
and the delivery of grow' plan is about
efficiency benefits. a renewed focus on This is a demanding
our efficiency and change programme. We
We continue to operate productivity and our have informed our unions
a tight balance between UK network through about our plan. We
achieving efficiency a range of new, digitally will work closely with
improvements whilst enabled work tools, them on strategy, detailed
delivering high service operational excellence design and deployment
levels. This requires and targeted investments. (See 'Industrial Action'
careful management This five-year plan above). Change underpins
of efficiency and Quality will enable us to maximise our future, with the
of Service. the benefits, particularly absence of major industrial
in delivery and processing, action a key turnaround
Royal Mail is launching of joint letter and assumption. Our ambition
its 'turnaround and parcel delivery, and is to deliver around
grow' plan in the UK. facilitate our transition GBP1 billion of costs
There is a risk we to become a parcels-led avoided, and a cumulative
will not be able to business where letters productivity improvement
deliver our transformation in the UK continue of 15-18 per cent over
programme and meet to be important. There the life of the plan.
our required cost avoidance will be an even greater
and productivity improvement emphasis on standardised
targets during the processes to drive
life of the plan. efficiency gains.
--------------------------------- ----------------------------------
Customer expectations and Royal Mail's responsiveness to market
changes
The industry sectors in which we operate remain highly competitive,
with customers demanding more and our competitors responding
quickly to these changing demands.
Customer expectations
and Royal Mail's responsiveness
to market changes
---------------------------------- --------------------------------- ----------------------------------
Changes in customer The impact of GDPR We plan to leverage
expectations and changes led to a reduction the Parcels technology
in the markets in which in marketing mail volumes. investments of recent
the Group operates, We expect addressed years by bringing to
could impact the demand letter volumes (excluding market new features
for our products and political parties' that improve convenience
services. election mailings) and customer control
to decline by five-seven of parcel deliveries,
Given the major cultural per cent in 2019-20, such as the Estimated
shift underway in UK due to the impact of Delivery Window feature
society - more e-commerce GDPR and continued we have just launched
and therefore fewer market uncertainty. or the Inflight Redirection
letters and more parcels We expect addressed feature that forms
- it is very important letter volume declines part of this coming
that Royal Mail changes to return to our medium year's development
too. term forecast range plan.
of four-six per cent
While we expect to thereafter. The rate Our 'turnaround and
handle many more parcels could move outside grow' plan underpins
in the years to come, of this range if economic the future of our UK
work we commissioned conditions falter or business - never forgetting
from external consultants business uncertainty the importance of letters
indicates we should deteriorates. - as e-commerce and
expect domestic letter other societal changes
volumes to fall by Competition in the profoundly impact on
about 26 per cent over UK domestic and international how we all go about
the next five years parcels markets is our daily lives.
or so. This structural intense, with competitors
decline will continue offering innovative We are extending our
to be driven by e-substitution, solutions that include UK network to a) maximise
lower GDP, the impact convenient, reliable the benefits of delivering
of GDPR and business delivery and return letters and small parcels
uncertainty. options, improved tracking together and b) handle
services and features more next day delivery
Our renewed focus on that put recipients and larger parcels
productivity, through increasingly in control more efficiently. This
operational excellence of their deliveries. will facilitate e-commerce
and key work tools, growth and increase
is vital to remaining Our UK Network review demand for our services.
competitive in the found that our existing We are targeting UK
UK parcels market - network has many strengths. parcel volume growth
one of the most developed It provides us with at above the expected
e-commerce markets good economics, particularly UK addressable parcel
in the world. So too in letters and small market growth rate,
is our network extension, parcels, with the latter underpinned by continued
which, in combination accounting for most investment in customer-led
with productivity gains, of our parcel volumes. features and channels.
should enable us to The review established
future proof our UK that our network is We will continue to
business against a not optimised for the promote the case for
backdrop of significant anticipated increase mail in a post GDPR
changes in customer in the proportion of environment. During
demand. next day delivery and the year, we helped
larger parcels, including expand the usage and
our current reliance availability of JIC
on manual sortation MAIL data (Joint Industry
and a two-sort approach. Committee) to offer
Our approach is to standardised data on
therefore seek the the reach and frequency
best of all worlds. of mail through all
This means maintaining mainstream media and
our existing network campaign planning tools.
for letters and small, JIC MAIL data helps
parcels, and a greater demonstrate more clearly
proportion of next to the market how consumers
day delivery items interact with all mail
extending our network types and the commercial
to handle large parcels benefits this drives
more cheaply and more for brands.
competitively.
--------------------------------- ----------------------------------
Economic and political
environment
---------------------------------- --------------------------------- ----------------------------------
Historically, there The Board continues Macroeconomic risk
has been a correlation to monitor the economic assessments are embedded
between economic conditions and wider external within the monthly
and the level of letter environment in the Letters forecasting
and B2B parcel volumes. UK and the Group's processes.
Low rates of economic other markets. Specific
growth could impact areas of focus include: The Group also has
our ability to maintain the following strategies
and grow revenue, either - Business uncertainty, in place:
by reducing volumes with the recent slowdown
or encouraging customers in economic activity, - A cost avoidance
to adopt cheaper products this may be an indicator programme to respond
or formats for sending that business customers to possible revenue
letters and parcels. will look to reduce headwinds. -Business
costs and compete aggressively initiatives that are
The UK voted to leave for contracts, impacting responding to fluid
the EU in 2016. The letter volumes, in competitive pressures.
shape of the future particular marketing - A possible, absorbable
relationship between mail. reduction in investment
the UK and the EU remains in the short term to
unclear. - A decline in the protect the cash and
value of Sterling, indebtedness position
The Labour party's which impacts our International of the business.
2017 manifesto included business in terms of
a pledge to bring a the exchange rate effect Internal procedures
number of private companies, on imports and exports, are in place to monitor
including Royal Mail, higher inflation resulting and manage ongoing
back into public ownership from increases in the risks associated with
prices of UK imported the UK leaving the
goods and services, EU. Material risks
increase terminal dues are reported to and
and wage increases. handled through a Brexit
steering group. This
- Economic growth in is led by the Group's
the Eurozone has recently Chief Risk and Governance
shown signs of weakening Officer and is comprised
in some countries (notably of senior executives.
Germany and Italy).
The Board will continue The impact on cross-border
to monitor this position parcel volumes will
in terms of the impact depend on the nature
on our international of the UK's future
parcel volumes, including trading relationships,
those handled by GLS. and what the future
EU/UK customs and VAT
More broadly, Royal arrangements will be.
Mail's business performance In a 'no deal' situation,
remains closely aligned we expect the rules
to UK economic growth. which apply to non-EU
We assume that GDP imports to be extended
growth will remain to EU items. Similarly,
below average in the we would expect the
near-term, and return EU to treat UK imports
to a typical growth as it does non-EU imports
rate in the medium-term. today.
While the shape of We are well placed
the future relationship to manage the impact
between the UK and of changes to customs
the EU remains unclear, processing. We are
it is not possible working closely with
to predict with any Government to put in
degree of accuracy place systems to ensure
the impact the UK's the movement of cross-border
departure from the parcels continues to
EU could have on the operate effectively.
Group. The main issues We have developed a
relate to any potential new model for the collection
economic downturn, of taxes and duties
and changes associated with Government. We
with customs and VAT are also engaging with
processing. We believe Ofcom and the Department
the immediate risk for Business, Energy,
to our domestic operations and Industrial Strategy
is low. We are working (BEIS) on the applicability
with key suppliers of Quality of Service
to ensure our supply targets after the UK
chain remains secure. leaves the EU.
We continue to monitor Royal Mail engages
the development of regularly with politicians
Labour Party policy and policy makers,
on nationalisation and closely monitors
closely. We continue the potential impact
to monitor the development of political and policy
of Labour Party policy changes on the company.
on nationalisation The Company runs an
closely. extensive public affairs
programme of engagement
with politicians and
policy makers. We regularly
demonstrate the significant
progress that the company
has made since privatisation
in 2013.
--------------------------------- ----------------------------------
Growing in new areas
---------------------------------- --------------------------------- ----------------------------------
Our success in growing Royal Mail Group is Our five-year transformation
in new areas of business well positioned to programme aims to build
is dependent on such grow in new markets a parcels-led, more
factors as our continued through its subsidiary, balanced, more diversified
ability to identify GLS. It has a replicable business. This includes
new profitable and and scalable business increasing the proportion
sustainable areas of model founded on the of Group revenue generated
business, implementing development of strong by parcels and increasing
appropriate investments, regional businesses. our geographical diversification
and having in place programme through our
suitable structures Through increasing 'scale up and grow'
to support continued its footprint and focusing plan for GLS and our
transformation of the on growth opportunities cross-border parcels
business. in areas such as the strategy. These are
deferred parcels space two of our three strategic
and B2C parcels market, priorities.
GLS is well positioned
to support Royal Mail Our strategy is designed
Group's overall strategy. to ensure that GLS
builds on its strong,
Royal Mail and GLS 30-year track record
together currently and makes a major contribution
generate GBP1.7 billion to the Group's product
in annual revenue from and geographical diversification
cross-border parcels over the next five
and letters. The cross-border years. The focus will
parcels market is a be on profitable revenue
large, attractive growth growth, including focused
opportunity for the yield management.
Group,
We will combine the
We are continuing to best of Royal Mail
seek opportunities and GLS to offer a
to develop a broader global proposition
revenue base and growth in smaller and larger
in the UK and overseas. cross-border parcels.
--------------------------------- ----------------------------------
Regulatory and legislative environment
The business operates in a regulated environment. Changes in
legal and regulatory requirements could impact our ability to
meet our targets and goals.
Absence of a sustainability
framework to sustain
the USO
---------------------------------- --------------------------------- ----------------------------------
USO finances are fragile. Ofcom will continue A key part of our 'turnaround
The regulatory system to be focused on monitoring and grow' plan for
applies some constraints Royal Mail's efficiency. our UK business is
to Royal Mail's ability It will complete its to underpin the sustainability
to compete for traffic delivery cost model of the Universal Service.
to support the costs to help inform Ofcom's The plan will be challenging
of the Universal Service view on how delivery to execute, and we
network. These may costs might change will be asking Ofcom
impact our revenues over time under different for its support, wherever
and our ability to scenarios. Ofcom intends possible, to facilitate
compete in the highly to extend this detailed its delivery. In doing
competitive sectors cost modelling work so, we will note that
in which we operate. to other parts of Royal our transformation
This could ultimately Mail's operations. is designed to future
impact our ability proof our UK business
to deliver the Universal The Universal Service, by enabling us to become
Service on a sustainable as we have stressed even more efficient
basis. to Ofcom and Government, and better placed to
needs to meet the 21st respond to changing
Given the continuing century requirements customer demands. We
structural decline of consumers and SMEs. will stress the power
in addressed letter In short, a contemporary and economic value
volumes, and broader USO is required. We of the Universal Service
changes in the parcels have also noted the as it makes commerce
market, Ofcom is enhancing importance of considering happen across the UK
its monitoring of Royal the revenue pools needed and connects customers,
Mail. It is bringing to sustain the Universal companies and countries.
forward some of the Service, alongside We will also renew
work it plans to undertake the legitimate needs our request to Ofcom
as part of its next of consumers and SMEs. for a level playing
review of the regulation Given that the USO field across the whole
of Royal Mail, which, has high, fixed costs, industry, including
overall, will be completed irrespective of volume, higher consumer protection
by 2022. The work it it is also crucial standards in parcels
will undertake includes: to focus on underpinning and lifting labour
a) a review of Royal USO and non-USO revenue standards across the
Mail's efficiency, pools to fund it. We delivery sector.
designed to give more have made all of these
insights into the future points both to Ofcom We undertake extensive
sustainability of the and Government. engagement with Ofcom
Universal Postal Service; across all workstreams,
and b) research to We have been engaging including the cost
review the extent to Ofcom to introduce modelling. We will
which the postal market supportive changes actively engage with
is meeting the reasonable to the regulatory environment Ofcom on both its efficiency
needs of users and that will help to keep and user needs work.
consumers and SMEs. the Universal Service We will also engage
market funded. Ofcom with the relevant Government
has not taken forward departments and consumer
our proposal for a interest groups.
proactive sustainability
framework. It has also
not taken forward the
opportunity to raise
consumer protection
standards across the
industry.
--------------------------------- ----------------------------------
Competition Act investigation
---------------------------------- --------------------------------- ----------------------------------
On 14 August 2018, Royal Mail is very Royal Mail Group will
Ofcom announced its disappointed by Ofcom's continue to robustly
decision following decision to impose defend our conduct
its investigation into a fine of GBP50 million. in the hearing before
whether Royal Mail The decision relates the CAT.
had breached competition to a price change announced
law. The investigation in 2014, which was
was launched in February never implemented or
2014, following a complaint paid under Royal Mail's
brought by TNT Post Access Letters Contract.
UK (now Whistl). Ofcom
found that Royal Mail Royal Mail strongly
had abused its dominant refutes any suggestion
position in the market that it has acted in
for bulk mail delivery breach of the Competition
services in the United Act, and considers
Kingdom by issuing that the decision is
Contract Change Notices without merit and fundamentally
on 10 January 2014 flawed.
which introduced discriminatory
prices. It fined Royal Royal Mail Group lodged
Mail GBP50 million. an appeal with the
Competition Appeal
Tribunal (CAT) on 12
October 2018 to have
both Ofcom's decision
and fine overturned.
The main hearing for
the appeal to the CAT
will take place in
Summer 2019. A final
decision is not expected
from the CAT until
around six to nine
months after this hearing.
No fine is payable
until the appeals process
is exhausted.
--------------------------------- ----------------------------------
Strategic workforce
planning
---------------------------------- --------------------------------- ----------------------------------
Workforce planning As our workforce ages, We monitor the demographic
could be adversely our physically demanding of our workforce, and
impacted as the demographic roles may become more track key external
of our workforce changes difficult to fulfil. metrics such as the
alongside the availability Advancement in technology employment rate and
of people with the is leading to increased demographic.
right skills to join automation, which requires
our organisation. a different specialist We undertake market
skillset. research and analysis,
We have added this and perform industry
risk to our Principal Availability of people benchmarking.
Risks to reflect its to fill frontline roles
strategic importance. may decline as more We review our workforce
people enter Further with an active programme
and Higher Education. of recruitment to fill
vacancies as and when
Economic trends and they arise.
the impact of Brexit
may influence the availability
of workers.
--------------------------------- ----------------------------------
Health, Safety and
Wellbeing
---------------------------------- --------------------------------- ----------------------------------
The health, safety The business has a We will continue to
and wellbeing of our large number of employees review SHEMS to identify
employees, contractors, including seasonal any further opportunities
agency workers and staff and agency workers. for streamlining and
members of the public It also operates a simplification. We
is of the utmost importance very large fleet, employs are investing in improved
to us. There is a risk a large number of contractors technology so that
that a health and safety and interacts extensively our risk assessment
incident or failure with members of the processes can be completed
of our processes could public. A large proportion more easily by managers
result in the serious of our employees spend and better meet the
injury, ill health most of their time needs of our business.
or death of employees, working outdoors, on
contractors, agency foot or driving, where Operational implementation
workers or members the environment cannot of SHEMS is monitored
of the public. be controlled. Due via an annual audit
to this wide reach programme and a professional
Such an incident may and the number of people and independent SHE
lead to criminal prosecution affected by the business' function is in place
or fines by the enforcing undertakings, the risk to provide advice,
authority or civil of serious harm to support and guidance
action by the injured people cannot be totally on the implementation
party resulting in mitigated. We acknowledge of standards.
large financial losses that every health and
and reputational damage safety incident has There is an annual
for the Group. a human impact. SHE initiative and
communications plan
Similarly, inadequate A full review of the in place. This is informed
arrangements for effectively integrated Safety, by a review of compliance
managing the health Health and Environment data, risk data, KPI
and wellbeing of our Management System (SHEMS) performance and legislative
employees could also has been carried out requirements.
lead to financial losses in 2018-19 to identify
and reputational damage gaps in legal compliance Employees have access
through increased sickness or risk controls, and to health and wellbeing
absence, lower productivity, identify opportunities assistance through
civil action or criminal for simplification our Feeling First Class
prosecution. to make the SHEMS more website, First Class
accessible for managers. Support helpline and
Occupational Health
provision.
SHE performance is
discussed and reviewed
by the Board and senior
leaders are committed
to driving full compliance
to SHEMS.
--------------------------------- ----------------------------------
Major breach of information
security, data protection
regulation and/or cyber
---------------------------------- --------------------------------- ----------------------------------
We are subject to a While no material losses As external threats
range of regulations, related to cyber security become more sophisticated,
contractual obligations, or data breaches have and the potential impact
and customer expectations been identified, given of service disruption
around the governance the increasing sophistication increases, we continue
and protection of various and evolving nature to invest in cyber
classes of data. of this threat, and security. Recognising
our reliance on technology that this risk cannot
In common with all and data for operational be eliminated, we continuously
major organisations, and strategic purposes, review our security
we are the potential we consider cyber security enhancement and investment
target of cyber-attacks and/or a breach of plans to reflect the
that could threaten data protection regulation changes in the threats
the confidentiality, a principal risk. we face. We are undertaking
integrity and availability activities across the
of data in our systems. Group to ensure compliance
A cyber security incident with GDPR. This includes
could trigger material protecting us from
service and / or operational loss of data, managing
interruption. information rights
and managing our marketing
A major breach of data permissions correctly.
protection regulation
is also considered
a risk that could result
in financial and reputational
damage, including loss
of customer confidence.
--------------------------------- ----------------------------------
Talent and capability
---------------------------------- --------------------------------- ----------------------------------
Our performance, operating Voluntary turnover The Group's remuneration
results and future in senior management policy sets out that
growth depend on our continues at similar the overall remuneration
ability to attract levels to previous package should be sufficiently
and retain talent with years but remains a competitive to attract,
the appropriate level business risk. retain and motivate
of expertise. executives with the
commercial experience
The capability, experience to run a large, complex
and cohesion of senior business in a highly
management is integral challenging context.
to delivering our transformation
programme. We operate a succession
planning process and
have in place talent
identification and
development programmes.
--------------------------------- ----------------------------------
Environment and sustainability New
---------------------------------- --------------------------------- ----------------------------------
Climate change and With the UK's largest We are investing in
governmental actions 'feet on the street' new vehicles and technologies,
to reduce its impact network of around 90,000 changing driving styles,
may have adverse operational, postmen and women, and making our transport
financial and reputational Royal Mail plays a network more efficient.
consequences. key role in keeping We are undertaking
carbon emissions low. trials and initiatives
The cost of operations in our current fleet
is likely to increase We have a requirement to drive down fuel
as we adapt our business to maintain a large consumption. Our fleet
in response to government fleet of vehicles. also includes electric
action to reduce the Growth in parcels is and liquefied natural
effect of harmful emissions also driving up our gas vehicles. Over
such as the introduction energy demand. We recognise time, we plan to increase
of Clean Air Zones our responsibility the number of alternative
in UK cities. to reduce the energy fuel or advanced technology
we use and emissions vehicles to meet current
An increase in the associated with our and future legislation.
frequency of extreme fleet to help improve
weather events may air quality in the We are also taking
result in disruption communities in which proactive steps to
to our operational we operate. reduce our energy and
pipeline and impact water consumption and
our ability to meet to reduce the amount
USO requirements. We of waste we send to
may also see price landfill.
rises as a result of
resource scarcity such
as water shortages.
This risk is now being
included as a principal
risk given its major
significance both internally
and externally.
--------------------------------- ----------------------------------
RELATED PARTY INFORMATION
This Note provides details of amounts owed to and from related parties, which include the Group's defined benefit pension plans (RMPP and RMSEPP), the Group's associate companies, and payments to key management personnel. Details of the Group's principal subsidiaries and associates are also provided.
Related party transactions
During the reporting year the Group entered into transactions with related parties as follows:
53 weeks 52 weeks
2019 2018
GBPm GBPm
--------------------------------------------------- -------- --------
Sales/recharges to:
RMPP (administration and investment service
recharge) 5 5
--------------------------------------------------- -------- --------
Purchases/recharges from:
Associate undertaking (Quadrant Catering Limited) (7) (7)
--------------------------------------------------- -------- --------
Amounts owed to:
Associate undertaking (Quadrant Catering Limited) (1) (1)
--------------------------------------------------- -------- --------
Amounts owed from:
RMSEPP(1) 6 -
--------------------------------------------------- -------- --------
(1) In December 2018 Royal Mail Group Ltd, a subsidiary of Royal Mail plc, agreed to a loan of GBP7,750,000 being made from the RMSEPP escrow to the Trustees of that Plan. This facilitated completion of the purchase of a buy-in policy of insurance. This loan is unsecured and is being repaid with the proceeds from the sale of Plan investments, as they are received by the Trustees. The loan is due to be repaid by 21 September 2019, or such later date as the Company agrees. At 31 March 2019, GBP6,200,200 is still outstanding. The outstanding loan is included as a non-current asset as it will be repaid to the pension escrow investment - money market funds.
The sales to and purchases from related parties are made at normal market prices. Balances outstanding at the year end are unsecured, interest free and settlement is made by cash.
Key management compensation
-------------------------------------------------- -------- --------
53 weeks 52 weeks
2019 2018
GBP000 GBP000
-------------------------------------------------- -------- --------
Short-term employee benefits (4,999) (14,592)
Post-employment benefits (23) (70)
Associate undertaking (Quadrant Catering Limited) (135) (551)
RMSEPP(1) (1,531) (3,679)
-------------------------------------------------- -------- --------
Total (6,688) (18,892)
-------------------------------------------------- -------- --------
Key management are considered to be the Executive and Non-Executive Directors of Royal Mail plc, all other members of the Executive Board (formerly the Chief Executive's Committee see pages 90 to 91) and the remainder of the Persons Discharging Manageria--l Responsibilities.
The ultimate parent and principal subsidiaries
Royal Mail plc is the ultimate parent Company of the Group. The consolidated financial statements include the financial results of Royal Mail Group Limited and the other principal subsidiaries listed below. The reporting year end for these entities is 31 March 2019 unless otherwise indicated
% equity % equity
interest interest
Company Principal activities Country of incorporation 2019 2018
--------------------------- ---------------------- ------------------------- --------- ---------
General Logistics Systems Parcel services
B.V.(2) holding company Netherlands 100 100
Royal Mail Estates Limited Property holdings United Kingdom 100 100
Royal Mail Investments
Limited Holding company United Kingdom 100 100
RM Property and Facilities
Solutions Limited Facilities management United Kingdom 100 100
The Company has complied with section 410 of the Companies Act 2006 by including, in these financial statements, a schedule of interests in all undertakings (see Note 28)
(2) GLS' reporting year end date is 31 March each year. No adjustment is made in the financial statements in this regard on the basis that, irrespective of the Group's reporting year end date (last Sunday in March) a full year of GLS results is consolidated into the Group.
STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE ANNUAL REPORT AND FINANCIAL STATEMENTS 2018-19
The Directors are responsible for preparing the Annual Report and the Group and parent Company financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and parent Company financial statements for each financial year. Under that law they are required to prepare the Group financial statements in accordance with International Financial Reporting Standards as adopted by the European Union (IFRSs as adopted by the EU) and applicable law and have elected to prepare the parent Company financial statements on the same basis.
Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and parent Company and of their profit or loss for that period. In preparing each of the Group and parent Company financial statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently; -- make judgements and estimates that are reasonable, relevant and reliable; -- state whether they have been prepared in accordance with IFRSs as adopted by the EU;
-- assess the Group and parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
-- use the going concern basis of accounting unless they either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the parent Company and enable them to ensure that its financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that complies with that law and those regulations.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Each of the Directors, whose names and function are set out on pages 88-89 confirm that, to the best of their knowledge:
-- the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the company and the undertakings included in the consolidation taken as a whole; and
-- the Strategic Report includes a fair review of the development and performance of the business and the position of the issuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
We consider the Annual Report and Financial Statements, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group's position and performance, business model and strategy.
This responsibility statement is approved by the Board of directors and is signed on its behalf by:
Rico Back Stuart Simpson
Group Chief Executive Officer Chief Finance and Operations
Officer
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
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June 14, 2019 06:00 ET (10:00 GMT)
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