Royal Mail admits the company and its staff face a 'difficult time' as profits slip and pensions row rumbles on

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Group's half-year profits fell by 30% to £77m, while revenues rose 2%
High Court injunction blocked planned postal workers strike last month
'Potential impact' of pensions row could knock group's second half results

Royal Mail has admitted the company and its staff are facing a 'difficult time', as the group's half-year profits fell by 30 per cent to £77million.

The group is also in the process of moving its workforce to a new defined benefit pension scheme, but continues to face stiff opposition from unions.

In October, Royal Mail won a High Court injunction blocking a planned 48-hour strike by postal workers orchestrated by the Communication Workers Union.

Royal Mail's share price is down 1.02 per cent to 385.05p.
While the group's annual results hang on the crucial Christmas period, Royal Mail said the 'industrial relations environment' could end up having a negative impact on its results in the second half.
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'As one of the largest employers in the UK, we are proud to provide the best pay and terms and conditions in our sector. We remain committed to that high quality employment in a very competitive industry, where labour standards are often poor', Royal Mail said in its latest results statement.

In the last half, FTSE 250 listed Royal Mail's operating profits before transformation costs increased by 7 per cent to £323million.

Revenues rose by 2 per cent to £4.8billion, with the strongest performance seen by its parcel business across Europe, known as General Logistics Systems.

In the UK, the number of letters being sent fell by 5 per cent over the period, with the group expecting similar declines over the next few years.

By contrast, the group said the parcel market remains 'highly competitive', adding it was performing 'well' in this market.

Looking ahead, Royal Mail said: 'We face increased cost pressures in the second half, including the potential impact of the industrial relations.'


Moya Greene, Royal Mail's chief executive, said: 'GLS delivered a strong performance with revenue up 9%. Outside the EU, GLS is also growing through selective acquisitions to capture higher growth markets.

'UKPIL revenue was broadly unchanged, having declined by 2% in 2016-17. Our investment in our business is paying off. We have won new parcels business; volumes were up 6%. There was a resilient letters performance.

'As previously announced, we are now in external mediation with the CWU. Our priority is to reach agreement with the CWU to help underpin the sustainability of the business.'

David Madden, an analyst at CMC Markets, said: 'Shares in Royal Mail opened higher and then quickly sold off after the company stated that profits after tax nearly doubled.

'The jump in profits was largely due to £106 million win fall from the tax office for closing the pension plan.

'The company makes the bulk of its money from delivering letters and parcels in the UK – and that department saw revenues remain largely unchanged. Whereas the international unit saw revenues jump by 9%. The share price has been losing ground since June 2016, and it could retest the 370p area.'

Royal Mail is recruiting an extra 20,000 staff over the Christmas period and said it will extend opening hours at many of its Enquiry Offices.

[Dorset Plodder]

Royal Mail is recruiting an extra 20,000 staff over the Christmas period and said it will extend opening hours at many of its Enquiry Offices.

Really? Perhaps they should stress that these extra staff are only for the Christmas period.... and non of them will actually be helping to deliver the mail the final mile!