New financial predictions for the year ending in March are based on the assumption that union members accept Royal Mail’s “final” salary offer, according to the parent company IDS.
The parent company of Royal Mail has increased its estimate of the cost of industrial action to date to £200 million and stated that up to 12,500 union members have participated in strike days.
In the first nine months of its fiscal year through December, International Distributions Services (IDS) reported that 18 days of Royal Mail walkouts contributed to the division’s £295 million operating loss.
It was stated that Royal Mail’s revenue decreased by over 13% compared to the same period in 2021. With a reduction in letter volumes and COVID testing kits contributing.
IDS also cited “worse retail patterns” as a cause of the weaker economy.
Royal Mail saw a 16.7% drop in revenue during the important Christmas quarter. Which was beset by strike action in December.
For Royal Mail, there are numerous obstacles in the future.
There is a new ballot for industrial action among its 112,000 frontline employees, who are members of the Communication Workers Union (CWU) who oppose proposed modernization plans and demand a better wage contract.
There are no indications of an end to the nasty – and personal – dispute, with corporation and union officials engaged in a war for public support.
As the holiday season approached, the verbal conflict escalated as union members complained that the corporation had brought in’scab’ contractors to help clear backlogs.
The disruption to international parcel delivery caused by a ransomware assault is also being dealt with by Royal Mail.
As a result of the issues within the company, IDS forecasts a negative trading cash flow for 2024 and an adjusted operating loss of about £400 million for Royal Mail’s fiscal year ending in March.
The full-year prediction relied on no fourth-quarter strike days and the CWU accepting its “final and best” salary offer.
IDS stated that it remains on schedule to meet its goal of reducing employees by 10,000 without implementing mandatory layoffs.
The August voluntary layoffs would be “far lower” than the 5,000-6,000 expected last year.
Since the beginning of 2022, IDS shares have lost more than half of their value, causing the firm to consider selling off Royal Mail.
The threat is a result of the bad performance of the UK company.
