Member Info for OliGarch

Well, well, well. Today at 11:45am our postie delivered a Special Delivery C5 and a T24 jiffy bag. Now that's what I call customer service.....Who needs a five day USO?.....lol

USO.....

I think that we've beaten this one to death now?

Until the RM BoD can obtain permission to reduce the service requirements then it's not going to change.

As TMS pointed out last week, it's on the "to do list" but it's not on the short term business plan.

"Short term actions to stabilise business, with focus on:

· Prioritising investment in high return projects.

· Reducing non-core costs.

· New cash management approach.

· Targeted price increases to offset inflation and costs of Universal Service Obligation (USO)".

this is doing the rounds on social media......

https://www.********************365496903460977/permalink/7163296997014233/

You old Marxist militant Derek..... welcome to the club.....lol

Ispy, I also have a question for the panel.

Can anyone tell me how to solve the issues with the USO and even tell me why it's not on the business plan? I would have thought that a yearly cost reduction of up to c£250m would have been in the top five on the list?

I honestly don't have a Scooby Doo and am suffering from high levels of desperation.....lol

TMS, that's brilliant. I look forward to the UK operation being back in profit and delivering a nice dividend in no time at all.

TMS, we're going to have to agree to disagree on the this one. I'm just pleased that changes to the USO aren't in the business plan and therefore the revenue that could be clawed back (estimated to be up to £250m) won't be deemed to be that important going forward.

And there was silly old Marxist me getting you wrong thinking that you were all about the money.....lol

TMS, "the business plan has nothing to do with the USO"..... that's great, then no change in the USO won't have a significant impact then.

An extract from yesterday's report.....

Risk 7: Failure to secure USO reform - Given the lack of urgent action by Government and Ofcom in pursuing USO reform, this risk is increasing with the passage of time. The UK has fallen behind other countries in modernising its postal USO. Royal Mail now needs urgent reform to ensure progress on its strategy and in the remediation of several interconnected principal risks. Whilst Ofcom has recently announced that it will review the potential for reform of the USO during 2024, the process proposed will take too long. Management will continue to make the case for change with Ofcom and Government in order to provide a more efficient, modern and sustainable USO.

Plus from the anti Marxist Sky News....

https://news.sky.com/story/royal-mail-blames-tough-economy-and-strike-settlement-costs-as-losses-grow-13009327#amp_tf=From%20%251%24s&aoh=17001586601293&referrer=https%3A%2F%2Fwww.google.com&share=https%3A%2F%2Fnews.sky.com%2Fstory%2Froyal-mail-blames-tough-economy-and-strike-settlement-costs-as-losses-grow-13009327

But IDS boss Martin Seidenberg reiterated the company's position that there was an "urgent" need for Royal Mail's Universal Service obligations to be relaxed.

It is currently required to deliver letters six days a week.

Mr Seidenberg said: "Looking ahead, we are transforming our business every day, but we can't do it all on our own.

"We also need the regulator and the government to do their bit.

"It's simply not sustainable to maintain a network built for 20 billion letters when we're now only delivering seven billion.

"The UK is not immune to the trends that we see across the world. Many other comparable countries have already reformed their Universal Service, and the UK is getting left behind.

"We welcome the fact that Ofcom will be reviewing options for the Universal Service, but the need for reform is urgent."

If I remember correctly both Maximas and yourself amongst others have been banging the drum for USO reform for the last couple of years and the IDS CEO agreed. Let's see what he can do.

Darbo, I believe that the businesses way of "managing it" was to ignore it and hope that nobody would notice?

TMS, "that’s because you’re like the couch potato football fan that sits in their arm chair yelling that ‘the manager is s*it’ and when you ask them why they haven’t got a scooby doo. Lol

And what exactly could I do to change these events? What have you done to change these events? I will tell you.... absolutely nowt..... because we, the minority shareholders and employees don't have the necessary voice. You can rant and rave about things needing to change but it's all about agreements and negotiation and we're not even in the building let alone the room.

I have never said that the USO doesn't need to be changed or reduced. What I have said is that the current agreement is the current agreement and until it is changed will remain the current agreement. It is a failure of senior management that they haven't been able to convincingly demonstrate and/or justify the need for reform to the UK Government or OFCOM. The very people who are entrusted to do their best for the shareholders and the business. Don't keep moaning to me or Derek about it.....email Seidenberg.

Speaking of agreements, I think that I may have mentioned this once or twice before but I, along with 90%+ of the workforce totally agree with changes to the sick policy as the overwhelming majority of employees take none or very little sick leave anyway so won't be affected by the changes.

One last note, yes GLS is performing very well but Thompson can take absolutely none of the credit for that can he? He has still left the UK operation in a much worse condition and without cross subsidy you have to wonder how much more the UK operation can withstand regarding financial losses. As I said earlier, Seidenberg seems to be hanging his hat on the UK Government and regulator helping him out here which could take a while.

TMS, "can you give us all a breakdown of the exact solution that you seemingly must know as to how IDS can maximise profit?....."

No, but even if I did they wouldn't take the word a Marxist. You see this is what the senior management and board of directors are paid a large sum of money to do....sort the paperwork out, legal issues, employment issues, balance the books, sort the dividend out etc.....the people who you were full of praise for over the last sixteen months, the people who were going to break the union and sort out the militant Marxist workforce.

Meanwhile, Thompson has walked away with a year's salary plus bonuses and allowances and left the business in no better condition than he found it. No doubt he will repeat this trick in his next appointment as well. This is what the benefits of failure looks like and the rest of us are bankrolling it.

"However, Seidenberg said the changes would “take time” despite “good progress” in implementing an agreement with the Communication Workers Union".

Hang on.....I thought that the union played no part in the running of the UK operation? Doesn't the head wag the tail here....lol

Return of the dividend payment...... I don't see why the GLS dividend payment shouldn't be around 10p given their increasing profits? I seem to remember that a few years ago the whole business made less than GLS is currently on track to make and the dividend was 9.6p.

So, Thompson dropped the bombshell around sixteen months ago that the UK operation was losing £1m per day. He then tried to make wholesale changes to the operation, much of which didn't have the confidence or backing of either the workforce or low level management and generally stirred the hornets nest and the SP plummeted.

Sixteen months later and the UK operation is now losing £1.7m a day. Now I understand that you have to crack a few eggs to make an omelette but how is this better? It has been mentioned that the UK operation could return to profitability by 2024/25 however with no cross subsidy is this really sustainable, especially as Seidenberg's plan seems to hint on the reliance of the UK Government making changes to the USO?

Bigtimebilly, turns out that you were correct?.....lol

Redceo, getting back to the point of GLS vs Royal Mail staff costs.... looking at today's report, GLS with a workforce of around 22,000 spent £544m on people costs which is £24.7k each. Royal Mail has a workforce of around 140,000 (Wikipedia says IDS has a workforce of 162,000) and spent £2693m on people costs for the same period which equates to £19.2k each. Perhaps the GLS workforce aren't so badly paid?

Seidenberg said. "We also need the regulator and the government to do their bit. It's simply not sustainable to maintain a network built for 20 billion letters, when we're now only delivering seven billion. The UK is not immune to the trends that we see across the world. Many other comparable countries have already reformed their Universal Service, and the UK is getting left behind."

So, when the UK operation, under Thompson's tenure, was actually reducing the USO by default, they still couldn't turn a decent profit. How much of a reduction in the USO terms does RM need to actually turn a 5% profit on USO items?

Redceo, "there is obviously a different mentality within the GLS workforce"......whilst that may be true, you also have to remember that GLS has a totally different business model to RM and only employs around 20,000 staff across Europe and North America.

Morning Derek, I knew the story but assumed that the £52m fine had put an end to it and there's no doubt that the claim for an additional £600m for interest is ludicrous. Traditionally, claims between two companies, especially those who have close provider/customer ties are kept behind locked doors and negotiated out of the limelight but the text is what took me by surprise and statements such as......

"Royal Mail's behaviour is symptomatic of a historical culture within the organisation which has been prepared to deliberately abuse its dominant position and then brazenly deny any wrongdoing" and

"Whistl suspects that IDS' shareholders and bondholders may not fully appreciate the financial consequences of Royal Mail's refusal to accept responsibility for its actions. For example, the recent bond offerings by IDS in September failed to include a single reference to the claim.

Failure to agree a settlement will result in a lengthy and costly trial with the inevitable distraction for Royal Mail's management team from delivering their turnaround plans. Whistl encourages IDS' investors to seek answers from the company's Board to the following questions in order to make their own assessment.

If Royal Mail has failed to disclose a claim for more than £600m - a figure that continues to rise, as interest accrues at £50m per year - what else is Royal Mail failing to disclose to the market and IDS shareholders?"

.......lead me to believe that the Whistl statement appears to be worded and timed to adversely target today's interim report and put doubt into the market. Even worse, now that Whistl have thrown their hat into the ring on the back of one payout, they could potentially have a puncher's chance to win some more, albeit not £600m hopefully.

Bigtimebilly, "tomorrow going to be a good day".

Care to elaborate on that statement?