TIDMRMG
RNS Number : 1022D
Royal Mail PLC
25 March 2014
The following amendment has been made to the 'Continued
Efficiency Programme' announcement released on 25 March 2014 at 7am
under RNS No 0561D.
Footnote 1 has been added
All other details remain unchanged.
The full amended text is shown below.
Royal Mail plc
25 March 2014
ROYAL MAIL PLC
CONTINUED EFFICIENCY PROGRAMME
-- Royal Mail has a continuous focus on efficiency. As part of
this programme, it will today commence a formal consultation with
Unite and CWU with a proposal to achieve a net reduction of around
1,300 roles. It is proposed that there will be a reduction of
approximately 1,600 roles, with around 300 new or enhanced roles
created.
-- The vast majority of employees impacted will be in the
Group's operational and head office managerial population. There is
no impact from this initiative on frontline employees, including
postmen and women, or the services Royal Mail provides to its
customers.
-- The programme is expected to deliver annualised cost savings
of around GBP50 million, of which approximately GBP25 million will
be realised in 2014-15.
-- No impact on expected cumulative cash investment over 2013-14
and 2014-15, which remains at around GBP1.2 billion.
-- Charge of around GBP100 million associated with the programme
will be recognised in transformation costs, resulting in a total
charge of around GBP230 million for 2013-14.
-- The underlying trends for the full year are expected to be
broadly in line with those seen in the first half.
Royal Mail Group (RMG.L) will today commence a formal
consultation with Unite and CWU, primarily across its managerial
population and with some impact in its support and administrative
functions. There is a proposed reduction of approximately 1,600
roles, with around 300 new or enhanced roles created. Since 2003,
almost 50,000 employees have left the Group. Royal Mail is
committed to conducting this consultation carefully and
sensitively. The Group has a strong track record of achieving
change through natural turnover, redeployment and voluntary
redundancy wherever possible.GLS, Royal Mail's European,
ground-based parcels delivery company, is not impacted.
Financial impact
The programme is expected to deliver annualised cost savings of
around GBP50 million, of which approximately GBP25 million will be
realised in 2014-15. In 2014-15, this benefit will partly mitigate
a likely increase of around GBP70-80 million[1] in the IAS19
non-cash pension service charge, due to external market conditions,
and the potential impact of any increase in direct delivery
competition.
There is no impact on the expected cumulative cash investment
over 2013-14 and 2014-15, which remains at around GBP1.2 billion,
as reduced costs of implementing certain projects in 2013-14 will
help to offset the cash costs of the efficiency programme in
2014-15.
A charge of around GBP100 million associated with the efficiency
programme will be recognised in the income statement for 2013-14
and included in transformation costs. Total transformation costs
for the year will now be around GBP230 million, compared with our
previous expectation of approximately GBP160 million.
The underlying trends for the full year are expected to be
broadly in line with those seen in the first half.
Moya Greene, Chief Executive Officer, Royal Mail plc, said: "We
are continuously improving our efficiency, whilst maintaining our
high Quality of Service. We need to do so in order to effectively
compete in the letters and parcels markets. This is the best way to
ensure the continued delivery of the Universal Service and the good
quality jobs we provide for our people."
- ends -
Contact information:
Media Relations
Beth Longcroft
Phone: 020 7449 8241
Email: beth.longcroft@royalmail.com
Candice Macdonald
Phone: 07436 267324
Email: candice.macdonald@royalmail.com
Royal Mail press office out of hours: 020 3338 1007
Investor Relations
Catherine Nash
Phone: 020 7449 8297
Email: investorrelations@royalmail.com
Disclaimer:
Figures presented in this announcement are not audited. This
announcement contains certain statements that constitute
"forward-looking statements". Such forward-looking statements
involve known and unknown risks, uncertainties and other factors,
which may cause the actual results, performance or achievements of
the Group or industry results to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking statements. Persons receiving this release
should not place undue reliance on any forward-looking
statements.
The Group disclaims any obligation or undertaking to update or
revise any forward-looking statements contained in this document to
reflect any change in its expectations or any change in events,
conditions or circumstances on which such statements are based
unless required to do so by applicable law, the Prospectus Rules,
the Listing Rules or the Disclosure and Transparency Rules of the
Financial Conduct Authority.
About Royal Mail plc: Royal Mail plc is the parent company of
Royal Mail Group Limited, the leading provider of postal and
delivery services in the UK and the UK's designated universal
postal service provider. UK Parcels, International and Letters
("UKPIL") comprises the company's UK and international parcels and
letters delivery businesses operating under the "Royal Mail" and
"Parcelforce Worldwide" brands. Through the Royal Mail Core
Network, the company delivers a one-price-goes-anywhere service on
a range of parcels and letters products. Royal Mail has the
capability to deliver to more than 29 million addresses in the UK,
six days a week (excluding UK public holidays). Parcelforce
Worldwide operates a separate UK network which collects and
delivers express parcels. Royal Mail also owns General Logistics
Systems (GLS) which operates one of the largest ground-based,
deferred parcel delivery networks in Europe.
[1] Based on current estimates of long-term corporate bond
yields, and inflation forecasts, and current pensionable payroll.
This may differ to the final outcome, which will be based on market
conditions at 30 March 2014, and pensionable payroll during
2014-15.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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