ROYAL MAIL PRIVATISATION/FINANCIAL RESULTS

The Union has today reaffirmed our opposition to the Government's announcement that it intends to privatise Royal Mail.

We have issued LTB 435/10 which explains that we will be placing an Emergency Motion before Annual Conference opposing any sell off of Royal Mail.

We can also advise Branches that Royal Mail have just announced their financial results for the year 2009/10. It is our view that the results have been announced to coincide with the Government's position. The results demonstrate that despite the challenges facing the company the Royal Mail Group can remain a successful organisation as a 100% publicly owned, fully integrated end to end service provider.

The purpose of this LTB is to comment in more detail on the company's financial results for 2009/10.

The headline figures are as follows:

The Group has returned an overall profit of £404 million – an increase of £83 million on the previous year's results.

The breakdown of the Group's overall profits are as follows:-

Royal Mail Letters - £121 million

Post Office Limited - £72 million

Parcelforce - £17 million

GLS (Royal Mail's European Parcel/Distribution Company/Acquisition) - £112 million

Group Centre - £82 million

In releasing the results the company also highlight that actual Group revenue is down for the first time in a decade due to the impact of competition and volume decline.

The Union will be analysing the results in more detail and discussing them with the Senior Management Team in the near future. We will also be highlighting the need for the company to be transparent on where we are with the pensions deficit, which we believe is due to be announced soon.

In the meantime, the Union has also made the following points in welcoming the results:-

• We have highlighted the very significant contribution CWU members have made through increased efficiency in all Royal Mail Group businesses. This is despite the impact of last year's dispute.
  
• However, we have pointed out that the only way to sustain success and deal with the real challenges that lie ahead, is for Royal Mail to remain wholly within the public sector and for the company to work with the Union - with managers at all levels recognising that transformation can only be delivered with the support of the workforce.

We have attached a copy of Royal Mail's press release, which also gives more details of the results.

Any enquiries on the above should be addressed to the DGS (P) department.

Yours sincerely

Dave Ward
Deputy General Secretary (P)

Billy Hayes
General Secretary

May 20, 2010

STRONG PROGRESS ON MODERNISATION AND EFFICIENCY
GAINS DRIVE 26% PROFIT INCREASE

Royal Mail Group today announced continued good performance in 2009-10 with operating profit rising by £83 million to £404 million, up by 26% on the previous year. The increased profit, which is in spite of the continuing decline in traditional mail markets in the UK and around the world, shows the positive impact of continued modernisation and increased efficiency across the Group.

• Three quarters of the £2 billion investment plan to transform Royal Mail's operations has now been spent, including a further £500 million invested in the last 12 months in new technology and new equipment for our postmen and women, bringing the total to £1.6 billion invested in modernisation since 2006. Continuing to invest in our business will be essential to keep up the pace of modernisation.
• Competition intensified during the year with over 13 million fewer letters a day being handled than just five years ago as people turn increasingly to other forms of communication including the internet and text.
• Group revenues dipped - for the first time in a decade - to £9,349 million but all four businesses within the Group remained in profit.
• The continued investment in modernisation and the high level of payments into the pension fund contributed to negative Group cashflow in the year of £517 million.

Key performance highlights in 2010