Tag: Royal Mail

Royal Mail Group’s Chairman, Allan Leighton, said today the first signs of financial stability had emerged in the interim results for the first half of the year. In the six months to the end of September 2002, the company made a trading loss of £147 million, £72 million less – a 33% improvement – compared to the first half of the previous financial year. Losses amounted to £1.1 million a day, compared to a £1.7 million daily loss in the first half last year, and an average of £1.2 million a day in the whole of last year.

The postal regulator Postcomm is set to climb down over price controls on the Royal Mail after warnings that its proposals could put the organisation out of business.

Martin Stanley, the chief executive of Postcomm, said yesterday that he expected the regulator to come up with a modified set of proposals which would be acceptable to Royal Mail.

Allan Leighton, the Royal Mail chairman, claims the price proposals as they stand would cut its revenues by £460m and force the organisation to default on a £3bn loan agreement with the Government.

Royal Mail Group yesterday raised the stakes in its dispute with the regulatorby claiming it may default on its debt if Postcomm does not back down over the tight price controls it proposed last month.

The announcement came as the mail operator reported half-year, pre-tax operating losses of Pounds 542m after exceptional costs compared with an operating loss before tax of Pounds 1.1bn for the last full financial year.

Royal Mail, the newly renamed postal group, will today set itself on a new collision course with unions, as it fleshes out the details of an employee incentive programme, which will reward workers with “shares” in the business.

Allan Leighton, chairman, will launch the so-called “phantom share” scheme. Unions, however, will argue that the action could pave the way for a full or part-privatisation in a few years’ time. They will question why the scheme is specifically linked to the creation of shares, rather than an arrangement pegged to a straightforward productivity bonus.

Mr Leighton and the Government have both pledged that there will be no privatisation of the state-owned postal group.