- 6 February 2020
- Transport / Logistics Services
Royal Mail is blaming the dispute with the Communication Workers Union (CWU) for its poor trading outlook this financial year.
In its Q3 trading statement the postal operator said: “The outlook for 2020-21 is challenging. The Q3 run rate for addressed letter volumes (excluding elections) has not shown the expected level of recovery. This, coupled with the ongoing uncertain business environment, means that we now expect a 1 percentage point increase in the decline, to 7-9% for 2020-21.
“Further, the ongoing industrial relations environment and delays to the delivery of our transformation plan, when combined with continuing economic uncertainty, increases the likelihood that UKPIL will be loss making in 2020-21.
“Unless we are able to make significant progress in delivering our transformation plan, our ability to meet the year 3 targets of our Journey 2024 plan will be compromised. We are taking additional mitigating actions, and will provide an update on progress with these and further guidance with our 2019-20 full year results, which are expected to be announced on 21 May 2020.
The Royal Mail statement concluded, “We continue to execute on our Journey 2024 plan as the best way to deliver a successful and sustainable future for the UK business.”
Rico Back, Group Chief Executive Officer, Royal Mail plc, summarised: “We had a busy Christmas season, which coincided with a General Election for the first time in almost a century. We achieved a high quality service for customers across the UK due to additional investment and, more importantly, the commitment and dedication of our people – I thank them for all their efforts.
“Overall, our recent trading performance has been broadly in line with our expectations. We confirm adjusted Group operating profit is expected to be £300-340 million (before IFRS 16) for 2019-20.
“We are disappointed that the CWU has issued a timeline for a ballot of its members for industrial action. We stand ready to invest £1.8 billion to modernise and grow in the UK. We want to reach agreement with CWU; but we cannot afford to delay this essential transformation any longer. So we are proceeding with key national trials and local initiatives, to improve our customer offering and grow the business, whilst maintaining good quality jobs and delivering a sustainable Universal Service.”