Tag: Royal Mail

Adam Crozier, the chief executive, says services used to be designed around what Royal Mail thought it could do. The trade and industry minister, Alan Johnson, used to be general secretary of the Communications Workers Union. He may need all his experience gained from that job in his new one. One of the tasks high on his to-do list is a review of Royal Mail in the run-up to the letters market being fully opened to competition. He is likely to face some tough talking from Royal Mail’s chairman, Allan Leighton. In a sense, Mr Johnson will be relieved that there is still something to talk about. Three years ago Royal Mail was in trouble: Mr Leighton dubbed it a “basket case” – a business the government could not even give away. It had the worst strike record in Britain, it was losing pounds 1m every working day, wages and morale were at rock bottom and the Equal Opportunities Commission was contemplating an investigation into harassment and bullying. Its very ability to trade as a going concern was in doubt. Since then, Mr Leighton and the executive directors under the chief executive, Adam Crozier, have led a dramatic turnround, though as yesterday’s remuneration packages revealed, they have been well rewarded under the company’s long-term incentive plan.

Royal Mail today announced a record GBP537 million profit on its operations for 2004-05 with quality of service to customers now hitting the highest levels in a decade. Royal Mail’s Chairman, Allan Leighton, said: “Postmen and women have achieved a fantastic turnaround. “They will now deservedly get a Share in Success payment of GBP1,074 amounting to GBP218 million of the company’s profit. It’s one of the biggest profit shares with employees in UK corporate history.” Mr Leighton said other highlights included First and Second Class mail, along with all Mailsort and Presstream bulk mail services and Standard Parcels, hitting or exceeding their target levels since last July. Since October the results for First Class mail and Mailsort and Presstream bulk mail are the best in a decade, latest figures show the number of letters lost has almost halved, and 99.92% of the mail arrives safely. There has been a 144% increase in the profit on operations for the financial year to March 2005 with the GBP537 million result comparing to a GBP220 million profit the previous year.

Allan Leighton, Royal Mail chairman, is expected to begin pushing next week for a partial privatisation of the national postal operator through an employee buyout. The proposal, which would enable Royal Mail to borrow an extra Pounds 2bn against its balance sheet, will test the government’s manifesto pledge that there were “no plans to privatise” the postal group. Royal Mail officials said yesterday there was enough “wiggle room” in the government’s position to allow the John Lewis-style plan of employee ownership to be implemented. The man who will ultimately decide whether the scheme could go ahead is Alan Johnson, a former postman and the new secretary of productivity, energy and industry.