UK Posties to get GBP 1,000 bonus from Royal Mail profits
The Royal Mail will say it is on track to make a GBP400m operating profit this year, triggering a cash bonus of at least GBP800 for each of its 200,000 employees, when it reports last year’s financial results within the next three weeks.
The scale of the recovery at Royal Mail has prompted civil servants to quietly work on plans to privatise the business, which is currently wholly owned by the Government, though not until well after the next General Election.
If a sale proceeds, it would be the biggest privatisation – probably valued at more than pounds 4bn – since British Rail’s tracks and stations were sold to investors as Railtrack in 1996.
The privatisation of Royal Mail would deliver a further windfall for postmen, who are expected to be allocated shares in the privatisation. No disposal would go ahead until Royal Mail has at least two years of steady and profitable trading behind it.
It is currently in the second year of a turnaround being masterminded by Allan Leighton, the former boss of Asda, and Adam Crozier, the former chief executive of the FA. In 2002-2003, it made a colossal loss of GBP197m.
Leighton has told staff that if the company makes profits of GBP400m for the year ending in March 2005, all staff, with the exception of himself, will receive the bonus. “We’re on course to make pounds GPB400m this year,” said an executive close to the company. “The payout to each of our 200,000 people will probably be GBP1,000.”
The company is due to announce its profits for the year to March 2004 at the end of this month. It is expected to disclose operating profits of GBP250m, in spite of the turmoil caused by a radical overhaul of the business. Executives at Royal Mail caution that the current year will be a tough one. The company has pushed through a restructuring that includes shifting all mail off trains and on to lorries, the construction of new sorting centres and – most controversially – the ending of the second delivery.
A new scheme to compensate commercial customers for poor service has come into operation. Postwatch, the body that represents users of the postal system, said it could result in stiff penalties for Royal Mail of around GBP80m this year, as a result of a deterioration of the mail service.
The company is reeling from revelations in a recent Channel 4 documentary that some delivery and sorting staff are poorly trained and managed. The Royal Mail last week moved to halt the chaos, which has seen customers complaining that mail is delivered as late as 9pm.
Last week Leighton addressed an emergency meeting of 3,000 delivery office managers in London. And, meanwhile, Crozier has taken direct responsibility for the day-to-day running of the letters business and has appointed a new operations director, Tom Melvin.
