Tag: Europe

Move to ease UK postal price controls

Posted by | Aug 9, 2007 | |

Royal Mail should be allowed to increase the price of a second-class stamp from 24p to 29p by 2010 to help its ‘deteriorating financial position, the postal operator’s regulator proposed on Thursday.

But the latest financial data from Royal Mail highlighted the urgent need for the operator to cut costs and improve its productivity.

Nigel Stapleton, Postcomm’s chairman, warned that “significant concerns” about Royal Mail’s financial position had emerged from an interim review of the 2006-10 price control imposed by the regulator.

Postcomm intended to allow some Royal Mail prices to increase “because its financial position is now weaker than it, and we, had envisaged when the control was finalized in May 2006”, Mr Stapleton said.

Under the proposals, the price of a second-class stamp could increase to 29p by 2010, as opposed to the 26p cap under the original control.

The increase would allow Royal Mail to cut the price of bulk business mail, and other items where it faces direct competition from rivals, to try to staunch its loss of market share.

Postcomm warned that Royal Mail had “not capitalised on opportunities” in growing areas of the market, such as online orders for packets – a criticism the company flatly rejected. The regulator said Royal Mail was failing to meet its annual 3 per cent target for improving efficiency, achieving only 1.9 per cent for 2006-07 and a forecast 0.6 per cent over the next three years. Royal Mail’s own analysis suggests it achieved gains of 4.6 per cent in 2006-07.

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Joint statement – Royal Mail dispute

Posted by | Aug 9, 2007 | |

Following a meeting between Royal Mail and the Communication Workers Union last Thursday 9th August, the national postal strike has been called off.

At a meeting today between Allan Leighton, Adam Crozier, Billy Hayes and Dave Ward, it was agreed:

• That both parties commit to talks on all the issues between them, hosted and facilitated by the TUC and supported by ACAS. Both sides commit to reach an agreement by 4 September
• That during this period the talks are on a confidential basis with no media or internal briefings unless explicitly jointly agreed. The CWU Executive and Royal Mail Board will receive regular updates on progress and would also be expected to undertake this confidentiality clause
• That for that period, Royal Mail will not serve notice or take any unilateral action to impose changes by executive action
• That for the same period CWU will suspend industrial action
• That the signatories to this joint statement will review the process as and when necessary

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Royal mail response to Postcomm price control proposals

Posted by | Aug 9, 2007 | |

Commenting on Postcomm’s proposals on a review of Royal Mail’s price control, Royal Mail’s Marketing Director, Alex Batchelor, said:

“Royal Mail knows that if we are to succeed in a very tough and open market we urgently need to modernise and become more efficient. Royal Mail is losing business to rivals whose costs and prices are lower than ours because they have the modern technology Royal Mail urgently needs to install. We have already made progress and have shown we can deliver the great quality of service our customers expect. What we must do is to move forward at pace to use the GBP 1.2 billion loan which the shareholder – the Government – has made available to modernise the letters operation with new technology to give it world-class productivity. That’s the focus for Royal Mail.

“Our costs are too high and the simple fact is that our prices are being undercut by rival postal operators and that’s resulting in one letter in every five this current financial year being handled by rivals.

Mr Batchelor added: “We absolutely reject suggestions from Postcomm that we have not capitalised on growth opportunities in the postal market. Despite intense competition, Royal Mail is delivering around 60% of all items bought online and we continue to develop new products and services to support this sector.”

Royal Mail is studying the Postcomm proposals carefully and will respond formally in due course.

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Post Office brings MoneyGram to all 14,000 branches

Posted by | Aug 9, 2007 | |

The Post Office and MoneyGram now offer by far the largest international money transfer network in the UK and also have a new fully computerized service making it even faster to send and receive cash too.

In just ten minutes, cash can travel from any Post Office branch to 125,000 locations in approximately 170 countries and territories worldwide. So, from Brighton to Bangladesh or Shetland to South Africa, it’s never been easier to use the Post Office and MoneyGram service.

MoneyGram was previously available at around 3,500 Post Office branches, but now all branches are equipped with the latest technology meaning MoneyGram transfers can be sent to and received from all 14,000 Post Office branches. Unlike some other money transfer services it is not necessary to have a bank account to send or receive a MoneyGram transfer.

An estimated GBP 2.7 billion* is sent overseas from the UK through international money transfer services each year and this is continuing to grow. In many cases, cash is being sent to friends and family overseas to cover educational or medical fees, or emergency funds.

* Department for International Development – UK Remittance Report 2005

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Austria Post Q2 net income 25.1 mln eur, beating consensus

Posted by | Aug 9, 2007 | |

Oesterreichische Post AG (Austrian Post) said its net income for the second-quarter was up 72 pct year-on-year to 25.1 mln eur, beating analyst consensus of 21.0 mln eur, thanks to continued strong growth in the company’s packets and logistics segments.

Austrian Post’s EBIT for the quarter was up 72.8 pct year-on-year to 29.9 mln eur, while its EBITDA came in at 52.8 mln eur, 8.9 pct higher on the year.

Analysts polled by Thomson Financial News had forecast the company’s quarterly EBIT at 26.8 mln eur and its EBITDA at 54.9 mln eur.

The postal services group said its revenues for the quarter came in at 541.3 mln eur, compared to 417.1 during the same period a year earlier. Analysts had expected second-quarter revenues to reach 543.5 mln eur.

Negotiations regarding the acquisition of additional firms in the speciality logistics sector are in their final stages, according to the Austrian Post.

The company said the recent market entry of a new competitor will have a negative impact on earnings in its parcel and logistics division, but said it stands by its forecast of full-year EBIT rising by 20-25 pct year-on-year.

Looking ahead to 2008 and 2009, Austrian Post said it has left its medium-term target of sustaining an EBIT margin between 7-8 pct unchanged and aims to have a dividend payout ratio of at least 70 pct, assuming that the company’s continued business development and financial position remain favourable.

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