Tag: Royal Mail

UK stamp rise to fund mail pension hole

Posted by | Oct 30, 2005 | |

Stamp prices will be linked in future to the size of the Royal Mail pension deficit under plans being drawn up by the postal regulator, PostComm. The scheme, which forms part of PostComm’s current review of the prices Royal Mail is allowed to charge, is intended to combat unpredictable fluctuations in the deficit caused by factors such as increases in life expectancy and stock market performance. The deficit has shot up from pounds 2.5 billion to pounds 4.5bn this year thanks to accountancy changes, which have stretched Royal Mail’s finances, making it ‘technically insolvent’, according to its chairman Allan Leighton. Sarah Chambers, the chief executive of PostComm, said: ‘We are considering a mechanism that would allow large fluctuations in the pension fund deficit to be reflected in postage prices. If the deficit were to rise substantially, for example as a result of equity markets falling, then this would feed through to higher stamp prices and vice versa.’

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Parcel giants bid for Royal Mail’s Euro arm

Posted by | Oct 30, 2005 | |

Royal Mail is under intense pressure from the Treasury to sell its successful European parcels business, GLS, as well as billions of pounds worth of property. Ministers and officials have told Allan Leighton, Royal Mail’s chairman, that the company must raise cash to help fill the pounds 4bn hole in its pension fund. “There is no way that we can simply write a cheque for billions to sort out the pension fund when the company is sitting on assets worth a fortune,” said a government member. Leighton has received approaches from the world’s largest logistics businesses, FedEx, UPS and TNT, all of which want to buy GLS. “We could sell it tomorrow,” said an executive close to Royal Mail. Leighton is determined to retain GLS. He believes Royal Mail’s future prosperity relies to an extent on its ownership of an unregulated, international business such as GLS.

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Protests at secrecy over UK Royal Mail findings

Posted by | Oct 29, 2005 | |

Alan Johnson, the trade and industry secretary, is to keep secret the findings of an independent expert advising the government on Royal Mail’s future, a move that yesterday sparked cross-party protests ahead of a decision on the postal operator’s ownership. The Department of Trade and Industry has ruled out making public any of the advice provided by Sir George Bain, whose work was commissioned by Mr Johnson in the summer. The decision, revealed in a written parliamentary answer this week, has prompted immediate calls for Sir George’s findings to be published alongside a government decision ex-pected within months on plans by Royal Mail’s management for an employee share giveaway.
There is growing concern among Labour backbenchers and trade unions that ministers could renege on a manifesto policy to keep the Royal Mail in “public hands” by agreeing to a proposal from Allan Leighton, chairman, to give employees tradeable shares in the business.

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UK First Class service hits record high level

Posted by | Oct 27, 2005 | |

Royal Mail’s First Class service has hit the highest level ever, beating the record performance achieved earlier this year, it was announced today. Preliminary results from independent research show that 94.2% of First Class letters arrived the day after posting during July to September this year – well ahead of the 93.0% target level. The 94.2% performance during the summer also easily beat the 93.6% spring performance during April to June – the previous best performance on record. Second Class mail beat its 98.5% target with a 98.8% performance during July to September. Royal Mail’s Chief Executive, Adam Crozier, said: “Royal Mail is delivering its best service on record. Postmen and women are providing customers with a world-class performance. I’m very proud of our people.”

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TNT Mail to take on Royal Mail with UK delivery service

Posted by | Oct 26, 2005 | |

Postal operator TNT Mail says it has ambitious plans to launch an end-to-end delivery service that will challenge Royal Mail’s dominance of the market, despite the fact TNT’s current service is about to be axed. TNT Mail has been using Express Dairies’ residential delivery service since last year to distribute small parcels, magazines and catalogues. However, mounting losses have forced Express Dairies to scrap the service as of next month. “It’s clear we will never be in a position to match Royal Mail’s delivery scale, but we will be its prime challenger,” said David Higham, development director for TNT Mail. “Where there’s a business case to put forward, we will be there. Our deal with Express Dairies was mainly concerned with heavier items and this is only a small part of the market.” Higham said TNT Mail will be looking at offering a service for heavier-weighted items and letters and could seek to develop this through a partnership or by acquisition.

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