TIDMRMG
RNS Number : 0438N
Royal Mail PLC
15 May 2020
TRADING UPDATE/DIRECTORATE CHANGE
Royal Mail plc
15 May 2020
This announcement contains inside information for the purpose of
Article 7 of the Market Abuse Regulation (EU) No 596/2014.
COVID-19 UPDATE AND DIRECTORATE CHANGE
Royal Mail (RMG.L) today provides a business performance and
COVID-19 update and announces:
i) senior management changes; and ii) its approach to
remuneration for 2019-20.
The Board and Rico Back have agreed he will step down as Group
CEO, and from the Group Board, with immediate effect. Keith
Williams becomes interim Executive Chair of Royal Mail Group and
Stuart Simpson becomes interim CEO of Royal Mail (UKPIL).
No bonuses will be paid to Executive Directors for 2019-20.
Around GBP25 million has been set aside for cash awards for
frontline staff, in recognition of their role during COVID-19.
Performance, current trading (Monday 30 March 2020 to Sunday 3
May 2020) and financial position :
-- Year on year UKPIL revenue down GBP22 million in April.
-- Substantial switch from letters to parcels in the UK. UK
parcels volume up 31 per cent and revenue up 20 per cent.
-- 308 million fewer addressed letters (down 33 per cent).
Letter revenue down 23 per cent, offset, in part, by 36 million
more parcels.
-- UKPIL costs up GBP40 million, driven by overtime and agency
resource costs due to high levels of absence, the introduction of
social distancing measures and PPE.
-- GLS situation still evolving. Shift from B2B to B2C parcels
across all markets in the UK and overseas.
Significant volatility in parcel volumes as COVID-19 pandemic
has developed across key markets.
-- Liquidity position remains strong. Total liquidity (including
undrawn facilities) around GBP1.8 billion. The Group has the
ability to access the Covid Corporate Financing Facility (CCFF), if
required.
-- Following engagement with key stakeholders on a package of
potential measures for the UK business, we will provide a further
update on 25 June 2020, along with Full Year Results 2019-20, to
cover possible outcomes for 2020-21, together with actions to: i)
mitigate the impact of COVID-19; ii) minimise losses in UKPIL; and
iii) ensure a sustainable long-term business.
COVID-19 update
-- Royal Mail is continuing to deliver to 30 million households
across the UK, fulfilling a vital role with respect to the
collection and delivery of parcels, home testing kits and
Government information.
-- UK absence has fallen from a peak of over 20 per cent to 11
per cent currently. Just under GBP 40 million has been committed to
spend on PPE. Fewer than 200 people are on the Government furlough
scheme.
-- In response to employee feedback, and the pronounced shift
from letters to parcels, we have implemented a temporary relaxation
of the Universal Service, with five-day letter delivery. Saturday
deliveries are scheduled to resume on 13 June 2020.
Management changes
-- The Board and Rico Back have agreed he will step down as
Group CEO and from the Group Board with immediate effect, and leave
Royal Mail on 15 August 2020.
-- Rico Back started his career in Royal Mail's parcels
operation, General Logistics Systems (GLS) in 1989, which he
developed into a leading European-wide parcels company with
subsidiaries in the US and Canada. In 2016 he became responsible
for the entirety of Royal Mail Group's parcels and international
business and was appointed to Royal Mail's Chief Executive
Committee. He was appointed Group CEO in June 2018.
-- Keith Williams will assume the role, with immediate effect,
of interim Executive Chair to lead discussions with stakeholders
about an accelerated pace of change across the business. He is
expected to remain in this executive role until a permanent CEO of
Royal Mail (UKPIL) is appointed.
-- Keith Williams joined the Board in January 2018. He took over
as Audit Chair in July 2018 and became Chairman in May 2019. He is
experienced in business transformation and industrial relations. He
was previously Chairman and CEO of British Airways Plc. He was
Deputy Chair of employee owned retailer John Lewis until April
2020. He is currently Chairman of UK retailer Halfords Plc.
-- Stuart Simpson has been appointed interim CEO of Royal Mail
(UKPIL). This is a Board appointment. Mick Jeavons will be interim
Group CFO.
-- We will conduct a comprehensive internal and external search
for a permanent CEO of Royal Mail (UKPIL). In order to ensure
greater focus, this permanent CEO of Royal Mail (UKPIL) will report
directly to the Board once Keith Williams returns to his Chair's
role.
Remuneration
-- In recognition of the role played by frontline staff, around
GBP25 million has been set aside to be paid as a cash bonus.
Frontline colleagues who, since March, have been at work throughout
the crisis will receive a cash recognition award of up to GBP200 in
June.
-- The Board has determined that no bonuses will be paid for 2019-20 to Executive Directors.
Keith Williams, Chair, Royal Mail plc, said: "Rico Back has made
a significant contribution to the evolution of our business over
his 20 years with us, particularly in building our international
parcels business and developing our Group strategy, which
recognised the urgent need for change to create a sustainable
business for the future. On behalf of the Board, I would like to
extend my thanks to Rico and wish him well in the future. "
Rico Back, Group CEO, Royal Mail plc, commented: "It has been a
privilege to lead a Company that is so much a part of UK life at
this crucial time in its history. I am proud of what I, together
with our dedicated and loyal team, helped to build in Royal Mail
and GLS. I look forward to seeing Royal Mail transform into a
parcels-led, international delivery company, that continues to
touch the lives of millions across the world."
There is no information required to be disclosed in accordance
with Listing Rule 9.6.13.
-ends-
Notes to editors:
i) Rico Back
Remuneration: Rico Back will be on garden leave until 15 August
2020. During this period, he will receive his salary and benefits.
Following this Rico Back will receive 9 equal monthly payments,
totaling GBP480,000, which represents 9 months' pay in lieu of
notice. These payments will be reduced by any alternative paid
employment that Rico Back receives. There will be no cash bonuses
or share awards in respect of 2019-20 or 2020-21. Rico Back has one
unvested Deferred Share Bonus Plan award awarded in 2018 (52,243
shares), relating to performance year 2017-18, and due to vest in
June 2021. This award will vest in line with the scheduled
timescales and subject to the plan rules. Rico Back's unvested
Royal Mail Long-Term Incentive Plan (LTIP) awards will lapse. Rico
Back has one unvested award under the GLS LTIP 2017, which was
awarded prior to his appointment as Group CEO. Tranche 1 of this
GLS LTIP met its performance conditions in 2017-18 and will vest in
July 2020 in line with the terms of the plan (EUR70,812 and 10,668
shares). Tranche 2 relating to performance year 2018-19 was waived
by Rico Back in 2019. Tranche 3, relating to performance year
2019-20 is due to vest in July 2020, subject to performance
conditions and the plan rules. There are no further awards
outstanding under the GLS LTIP. The Remuneration Committee
considers that the above treatment of Rico Back's incentive
payments and awards to be appropriate and in line with the
Directors' Remuneration Policy. Rico Back will receive a capped
contribution of GBP50,000 (excluding VAT) towards legal fees
incurred in connection with his departure; and a capped
contribution of GBP25,000 (excluding VAT) towards outplacement
support. Rico Back is not eligible for any further payments for
loss of office. All Rico Back's Royal Mail earnings (including
bonus payments) are subject to UK tax law. More information will be
set out in the 2019-20 Directors' Remuneration Report.
ii) Keith Williams
Remuneration: As Non-Executive Chairman of Royal Mail Group,
Keith Williams currently receives a fee of GBP300,000 per annum.
This fee will remain unchanged during the period that he is
Executive Chairman. Keith Williams will not participate in the
Annual Bonus (cash or Deferred Share Bonus Plan), LTIP, benefit
programme or any Group pension scheme.
Enquiries:
Investor Relations
John Crosse
Phone: 020 7449 8183
Email: investorrelations@royalmail.com
Media Relations
Shane O'Riordain
Phone: 07770 544 585
Email: shane.oriordain@royalmail.com
Beth Longcroft
Phone: 07435 768 549
Email: beth.longcroft@royalmail.com
Company Secretariat
Mark Amsden
Phone: 020 7449 8289
Email: cosec@royalmail.com
Disclaimer
Figures presented in this trading update are not audited. This
trading update 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 Guidance and Transparency Rules
of the Financial Conduct Authority.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCKKPBKOBKKQPD
(END) Dow Jones Newswires
May 15, 2020 03:07 ET (07:07 GMT)
Royal Mail (LSE:RMG)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Royal Mail (LSE:RMG)
Historical Stock Chart
Von Jul 2023 bis Jul 2024