Tag: UK

UK Business Post experiences more suffering as trading fears persist

Posted by | Oct 14, 2005 | |

Fears that trading at Business Post Group may have deteriorated since last month’s shock profits warning pulled the FTSE 250 mail operator down a further 5 per cent. At the time of last month’s alert, the company said the rate of decline in volumes in its UK parcel delivery service had slowed from August’s trough. However, Altium Securities remains cautious, suggesting that continued gloom from the retail and technology sectors indicates that the key Christmas period may be poor. Further, Andrew Nussey, analyst, believes there is a risk that selective price rises in delivery charges will not stick as business customers become more cost conscious.

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Dempsey threatens to remove Irish An Post’s monopoly

Posted by | Oct 14, 2005 | |

The Government is threatening to remove the final part of An Post’s letter post monopoly if the Communications Workers’ Union (CWU) goes ahead with industrial action at the troubled State company.

With a ballot already underway for strike action that is likely to disrupt the mail in the busy pre-Christmas period, Government sources said that the Minister for Communications Noel Dempsey was minded to remove the monopoly immediately instead of waiting until an EU directive takes force in 2009.

Such an action would cause severe commercial difficulties for An Post in the long run, as it would free the hand of rival private sector companies to introduce their own mail services in big urban areas.

Despite the difficulties that such action would prompt for An Post, Government sources said the Minister believes that no alternative course is open to him as any intervention in the company’s industrial relations process would be in breach of social partnership.

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UK Postal regulator warns off government price control proposals

Posted by | Oct 14, 2005 | |

The postal services regulator has warned the government not to interfere in its fight with Royal Mail over future price controls, in spite of the fact the controls will be crucial in determining the financial health of the state-owned company.

Sarah Chambers, chief executive of Postcomm, said Sir George Bain – who is reviewing Royal Mail’s future for the government – had been told any arbitration between the regulator and the company had by law to be carried out by the Competition Commission.

“The discussions we’ve had with Sir George have made it clearer what he’s not going to be doing – he’s not trying to determine our price control or somehow act as an arbitrator,” Ms Chambers told the Financial Times. Asked if Sir George was acting as a go-between, she said: “I think at the beginning that might have been the way they saw it but we made it clear that was not as we saw it.”

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UK’s CVC busy putting its stamp on Europe’s postal industry

Posted by | Oct 13, 2005 | |

Private equity group CVC is busy putting its stamp on Europe’s postal industry. This summer it bought 22percent of Post Danmark and yesterday the two jointly took a 50percent stake, less one share, in Belgium’s postal operator, De Post-La Poste. What the two appear to be offering is a combination of CVC’s financial clout and Post Danmark’s industry expertise. Both are vital in an industry where liberalisation is the name of the game and country monopolies look headed for the bin. At the same time the CVC/Post Danmark model appears to offers the prospect of continued state control – and politically sensitive social responsibilities – alongside much needed cash for investment.

Is it too good to be true? For trade secretary Alan Johnson, mulling options for Royal Mail, the answer is likely to be yes. Even CVC would blanche at the huge investment needed to modernise Royal Mail and make a meaningful dent in its pensions deficit. And opening Royal Mail to private equity would send the political temperature soaring.

Within the framework of the existing CVC postal deals there are questions to be answered. At some point CVC will want an exit. The stock market offers one route – but does not offer a solution to the anomaly of a listed company with majority state control, a hatful of social responsibilities and private sector competition. Nor does a trade sale look more promising. The number of potential buyers would be limited and liberalisation could well end up in consolidation.

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