Tag: Royal Mail

Royal Mail came under attack yesterday for refusing to publish its delayed financial results as it emerged that it has given them to the postal regulator.

Royal Mail would not give a reason, but speculation is growing that it wants to avoid controversy over executive bonuses or hide the fact that its financial performance is better than expected. Both issues would prove tricky as it battles with the Communication Workers Union.

Royal Mail said that it had not set a date to make the results public. The figures are for its year to the end of March and usually are published in May. It has avoided a fine by sending the numbers to Postcomm within a deadline set by its license, but the regulator has no obligation to make them public.

The delay comes as postal workers are staging a month of strikes in the worst dispute to hit the business for 11 years and as thousands of post offices are being closed.

Royal Mail had to supply figures to Postcomm no later than four months after the end of the financial reporting period, (therefore, July 31) to fulfill its license. It is obliged to file the accounts with Companies House at the end of next month, six months after the close of its reporting period.

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.