Tag: Royal Mail

Royal Mail practices what it preaches and encourages media integration

Posted by | Nov 1, 2007 | |

Royal Mail has launched an integrated business to business campaign to demonstrate the power of combining direct mail and digital media.

The integrated campaign called “Meet Mr Complete” features direct mail and a microsite both created by Proximity London. It centres on the idea of integration being a more complete way to communicate with customers. Recent research by Royal Mail revealed that integrating digital advertising with direct mail campaigns can increase customer spend by almost 25 per cent.

Meet Mr Complete targets more than 5,000 business people to demonstrate that using digital and direct mail together achieves greater impact with consumers.

Activity begins with a personalised direct mail pack designed to look like a computer desktop. Inside each pack are instructions on how recipients can fold the mailer to create their own origami Mr Complete man. To encourage further engagement with the campaign a unique personalised web address is printed in each mailing which will take recipients through to an individualised Meet Mr Complete microsite.

Once online customers are guided through their own personal site by Mr Complete; an interactive 3D animated character, who demonstrates the benefits of integrating direct mail and digital media. Mr Complete finishes the journey by offering a follow up phone call from a Royal Mail media expert.

The campaign concludes with a final direct mail pack with a hand-crafted Mr Complete origami man personalised with the recipient’s name and reminding them of the positive brand benefits and increased campaign effectiveness that integrating direct mail with their digital offering can bring.

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Royal Mail posts drop in profits

Posted by | Oct 31, 2007 | |

Royal Mail said on last Wednesday 31st October revenue in its letter business was down 78 million pounds (USD 162 million) in the first five months of the current year and annual operating profit dropped by one third.

State-owned Royal Mail, which lost its 350-year monopoly on postal services last year and recently faced strikes by workers, said it expected to be trading around breakeven this year and next due to declining mail volumes and investment.

The group reported operating profit for the full year 2006-2007 year of 233 million pounds, in line with expectations, following a sharp rise in pension fund costs to 722 million pounds from 193 million, falling mail volumes and increased competition.

Royal Mail said it faced making annual payments of 800 million pounds over the next 17 years to cover both its pension deficit of around 5 billion pounds and ongoing contributions.

Royal Mail’s Chief Executive Adam Crozier has said the company desperately needs to modernise, and was investing around 4 billion pounds to do so, to compete and prevent the business from failing.

The firm has plans to reduce its workforce by around 40,000, or 27 percent, by automating mail sorting processes and to fight private competition from Business Post Dutch mail company TNT NV and others.

The growth of email, text messages and the availability of vehicle tax discs and television licences online have also dented profits.

The Communications Workers Union (CWU) said earlier this month over 130,000 staff walked out in a dispute over pay, pensions and shift changes, causing delays and disruption, particularly to firms dependent on mail order business.

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Royal Mail hit by pension costs

Posted by | Oct 31, 2007 | |

The group posted earnings of GBP 233m, but said that but for a £75m government loan, this figure would have fallen to GBP 158m – half the GBP 355m made last year.

Pressures from rising pension costs, falling mail volumes and increased competition were blamed.

The figures do not cover the period over the summer when Royal Mail was hit by a series of strikes.

Declining volumes of post, competition in the mail market and the rising use of electronic communication, such as e-mail, continued to eat into Royal Mail’s letters business, with revenues down GBP 78m during the first five trading months of 2007-08 on the previous year.

The revenue fall came despite a rise in postage prices in April.

We anticipate that the company’s current level of contributions to the pension plan will reduce to 22 pct in five years’ time from the existing level of 30 pct.

Royal Mail

These factors, in addition to the “huge investment” that the group is about to make to update its business practices, mean that Royal Mail will make no profit this year or in its 2008-09 period.

And it said that without the contribution from its unregulated European parcel delivery service, General Logistics Systems, one of the few areas of growth for the Royal Mail last year, the group would become loss-making.

There was no indication of the cost to its business from the strikes organised by the main postal union, the Communication Workers Union, between June and October.

Industry observers estimated that about GBP 260m was knocked off profits during this period as a bitter dispute over the firm’s modernisation plans, including unpopular reforms to its pension scheme and radical changes to working practices, led to a series of walkouts.

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Royal Mail Chief pockets GBP 1.1m as profits dive

Posted by | Oct 31, 2007 | |

Royal Mail’s Chief Executive, Adam Crozier, has been awarded GBP 1.12 million in pay and bonuses as the strike-ridden UK postal service reported a 34.3 per cent fall in profits as a result of increasing pension costs.

The group also revealed today it only expects to break even in the current financial year because of funding its company pension plan, increased investment and falling postal volumes.

Mr Crozier, who was criticised during the recent postal crisis for allegedly failing to attend talks with unions, was paid a basic GBP 633,000 as well as a GBP 469,000 performance-related bonus, some of which has been deferred into a long-term incentive scheme. With GBP 18,000 in benefits, Mr Crozier was rewarded a total £1.12 million.

Allan Leighton, Non-Executive Chairman at Royal Mail, who recruited Mr Crozier in 2003, was paid a performance-related bonus of GBP 200,000 on top of GBP 20,000 in basic pay.

The group admitted that the same competition and volume factors had impacted current trading, with profits down by GBP 78 million in the first five months of the financial year.

Royal Mail said today: “Key issues for the company as we move forward are the continuing high cost of funding the pension scheme, the continuing decline in volumes as customers move to other forms of communication and the beginning of the huge investment we will now make in the modernisation of the company.

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Royal Mail embarks on modernisation

Posted by | Oct 31, 2007 | |

Royal Mail Group today announced profits, in line with expectations, of GBP 233m for the 2006-07 financial year – a fall of a third from the previous year, principally as a result of a sharp rise in pension fund costs by £193m to £722m. Underlying profits, omitting the benefit of GBP 75m from the Government’s Social Network Payment to support the loss making Post Office network showed a steeper decline, at £158m, less than half the prior year’s result.

Royal Mail said that pressures on its performance from rising pension costs, falling mail volumes and increased competition underlined the urgency with which it now needs to put the next stages of its modernisation plan into action. The Group now has in place the key elements on which that programme is built:

• Around £4bn commercial funding package from the Government to enable us to modernise the business and incentivise our people through our new ColleagueShare scheme
• Agreement with the unions on the flexibility and changes in working practices that are vital to modernise successfully
• Support from the unions for the pension reform needed to allow the Group to become competitive and to protect a Defined Benefit pension scheme for our existing employees

During the first five trading months of the current year, 2007-08, the pressures of falling mail volumes and competitor activity in the wider communications market have become significantly more pronounced, with revenue in the Royal Mail Letters business down £78m compared to the same five months in 2006-07.

Key issues for the company as we move forward are the continuing high cost of funding the pension scheme, the continuing decline in volumes as customers move to other forms of communication and the beginning of the huge investment we will now make in the modernisation of the company. All these factors combined mean that this year and next we expect to be operating at around breakeven.

The full results for the year and a current trading update are set out in the attached statement from the Chairman and Chief Executive.

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