Mike G wrote: ↑15 Feb 2024, 15:42
The only reason RM aren't already in much deeper financial trouble is due to the effective cross subsidy from the more profitable arms of IDS, mainly GLS.
Perhaps you need to follow your own advice and take a closer look at the accounts.
The company deliberately chose
NOT to cross-subsidise from GLS!! It's a very deliberate decision to make the USO look financially unviable.
And Royal Mail aren't in as much financial trouble as you think and we would be a lot better off
if wealthy shareholders didn't extract billions of pounds out of the company during the last decade. If you have worked at this company for any length of time, you will be aware that our previous profits allowed us to actually buy GLS (which was then German Parcel) in 1999 amongst many other courier companies in Europe and the US.
Last year the group as a whole were still sitting on retained earnings of £3.8 billion and liquidity of £1.7 billion. So there is money there. And when you look beyond the dramatic headlines of the £1 billion loss in 2022-23 (with £200 million loss due to strike action), most of this related to impairment charges, so the actual adjusted loss across the group was just £71 million for 2022-23. That makes a lot of sense because in that year alone the actual revenue across IDS only decreased by 5%.
The only reason why Royal Mail wants rid of the USO is
not because it is in any financial trouble but because it wants to make even more profit. And they will because they have "righsized" the business in the last few years and given posties bigger rounds and the deal ensures that there is less sick pay which cost the business £200 million plus they are recruiting staff on less pay. Where do you think the bulk of our future profits are likely to go? I've left you a clue.
On the face of it, shareholder value is the dumbest idea in the world.