Royal Mail Set to Announce “Massive” Christmas Trading as Threat for Strikes Dissipates

Photo by Monica Arellano-Ongpin/Flickr

On Thursday, Royal Mail, the postal giant, is set to deliver “massive” Christmas trading figures as threats of industrial action has all but disappeared.

The company fell out of the FTSE 100 last autumn. It has made the shares of the firm rise since a November nadir, increasing by over 20 percent.

Last October, an organised 48-hour walk-out by the Communication Workers Union (CWU) was stopped after a legal challenge was given by Royal Mail. Since then, discussions restarted regarding changes to pay and pensions with the mood music suggesting that an agreement could soon be reached.

Last Friday, Terry Pullinger, the CWU deputy general secretary, said that talks had allowed significant progress, saying that the union was on the “cusp of something very special” and both were on the “verge of securing an agreement”.

However, Pullinger noted: “Nothing is agreed until everything is agreed.”

Nicholas Hyett, the Hargreaves Lansdown equity analyst, stated: “Until an agreement is reached tense industrial relations could slow further cost-saving initiatives. Since this is a key part of the investment story at Royal Mail, any progress on cost avoidance, or lack thereof, will attract attention.

“Royal Mail’s first-half numbers were good. Particularly notable was the uptick in revenues from UK parcels and a strong performance from the international GLS business.

He added: “However, the Christmas period is massive for Royal Mail. The group opened six temporary parcel sort centres and recruited over 20,000 staff, so a poor showing here has the potential to undo a lot of the good work in the first half. Fortunately, numbers from the British Retail Consortium suggest online retail had a strong Christmas, boding well for Royal Mail’s parcels business.”