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| Royal Mail urged to end pay dispute after reporting profit rise | |
| (35 minutes later) | |
| The Unite union has called on Royal Mail to make an improved pay offer to staff and resolve an industrial dispute, as the delivery company reported higher annual revenues and underlying profits. | The Unite union has called on Royal Mail to make an improved pay offer to staff and resolve an industrial dispute, as the delivery company reported higher annual revenues and underlying profits. |
| More than 4,800 Royal Mail managers are taking industrial action short of a strike, including working to rule and a ban on overtime, after 96% of Unite members rejected a “paltry” 1.3% pay offer for the year starting September 2015. | More than 4,800 Royal Mail managers are taking industrial action short of a strike, including working to rule and a ban on overtime, after 96% of Unite members rejected a “paltry” 1.3% pay offer for the year starting September 2015. |
| The union warns the action will eventually affect postal deliveries to 27 million homes across the UK. | |
| Unite’s call came after Royal Mail reported a 5% rise in adjusted operating profit before transformation costs – its preferred measure – to £742m in the year to 27 March. Revenues rose 1% to £9.2bn– hailed as a “resilient performance” by the company’s chief executive, Moya Greene. | Unite’s call came after Royal Mail reported a 5% rise in adjusted operating profit before transformation costs – its preferred measure – to £742m in the year to 27 March. Revenues rose 1% to £9.2bn– hailed as a “resilient performance” by the company’s chief executive, Moya Greene. |
| Royal Mail’s UK business made a £608m profit, down from £615m the previous year. | Royal Mail’s UK business made a £608m profit, down from £615m the previous year. |
| Brian Scott, Unite officer for Royal Mail members, said: “Unite members will be extremely frustrated that their hard work to deliver a positive financial result is not being recognised by the company. | Brian Scott, Unite officer for Royal Mail members, said: “Unite members will be extremely frustrated that their hard work to deliver a positive financial result is not being recognised by the company. |
| “With the UK part of Royal Mail making £608m profit, it’s clear that the company can afford to reward Unite members for their hard work with an improved pay offer.” | “With the UK part of Royal Mail making £608m profit, it’s clear that the company can afford to reward Unite members for their hard work with an improved pay offer.” |
| At group level, full-year pre-tax profits fell 33% to £267m if transformation costs and other one-off items such as pension charges are taken into account. The firm forecasts a further £160m costs in the current year, more than estimated. | |
| Related: Royal Mail threatens to halt deliveries to home of mail-snatching cat | Related: Royal Mail threatens to halt deliveries to home of mail-snatching cat |
| In the UK, parcel deliveries rose 3% last year while letter volumes declined by the same amount. | In the UK, parcel deliveries rose 3% last year while letter volumes declined by the same amount. |
| Royal Mail faces tough competition from the likes of FedEx and UPS in the parcel market, which has eaten into its market share. Amazon, once a key customer, recently started its own delivery business. | Royal Mail faces tough competition from the likes of FedEx and UPS in the parcel market, which has eaten into its market share. Amazon, once a key customer, recently started its own delivery business. |
| Greene told Reuters: “It’s an intensely competitive time in the UK and I don’t see that letting up anytime soon and I see the trends in that regards to be broadly the same this year as they were last year.” | Greene told Reuters: “It’s an intensely competitive time in the UK and I don’t see that letting up anytime soon and I see the trends in that regards to be broadly the same this year as they were last year.” |
| The company has embarked on an ambitious cost-cutting and modernisation drive and confirmed it had laid off 3,500 workers over the year. | The company has embarked on an ambitious cost-cutting and modernisation drive and confirmed it had laid off 3,500 workers over the year. |
| Greene said: “We are introducing new and improved products and services and responding quickly to changing customer needs.” | Greene said: “We are introducing new and improved products and services and responding quickly to changing customer needs.” |
| The shares slumped nearly 6% at one stage and later traded down 1.8% at 499p. The 500-year-old company was privatised in 2013 and floated on the London Stock Exchange. | The shares slumped nearly 6% at one stage and later traded down 1.8% at 499p. The 500-year-old company was privatised in 2013 and floated on the London Stock Exchange. |
| Dave Ward, the Communication Workers Union general secretary, said: “Royal Mail Group’s strong financial performance, in the face of tough market and regulatory pressures, show the company is well placed to deliver future growth and innovation in the business, working closely with the CWU. | Dave Ward, the Communication Workers Union general secretary, said: “Royal Mail Group’s strong financial performance, in the face of tough market and regulatory pressures, show the company is well placed to deliver future growth and innovation in the business, working closely with the CWU. |
| “The continued fall in letter volumes and the significant level of competition Royal Mail already faces should serve as a reminder to Ofcom that protecting daily deliveries should be the number one priority of its review.” | “The continued fall in letter volumes and the significant level of competition Royal Mail already faces should serve as a reminder to Ofcom that protecting daily deliveries should be the number one priority of its review.” |
| The regulator is is looking into whether Royal Mail has breached competition law. | The regulator is is looking into whether Royal Mail has breached competition law. |