Cookies help us improve your Royal Mail online experience. If you accept their use, continue using our site. Or, find out more about cookies
Royal Mail welcomes the Government’s announcement today that it intends to relinquish overall control and achieve minority ownership in Royal Mail. The Government intends to dispose of a majority stake in Royal Mail this financial year. The Company also welcomes the Government’s intention to give 10 per cent of all the shares in the business free to eligible Royal Mail employees in the UK at the time of Initial Public Offering (IPO).
Moya Greene, Chief Executive Officer, Royal Mail Group commented: “Royal Mail aims to combine the best of the public and private sectors. Our employees will have a meaningful stake in the company and its future success. The public will have the opportunity to invest in a great British institution.
“As we move into the private sector, the current legal position is that all terms and conditions that apply to Royal Mail employees would remain in place, on the same basis. To provide further reassurance, we will create a legally-binding and enforceable contract with the CWU. Pay and protections could not be changed for the period of the contract without CWU agreement.”
Many previously Government-owned companies – Rolls Royce, BP, etc. – have flourished under private ownership. The Government has said it is not a good owner of large businesses. Private ownership will enable Royal Mail to become more flexible and fleet of foot in the fiercely competitive markets in which we operate. Some of our competitors are successful, privately-owned global players - which invest when they need to. Like them, we need to access to capital from time to time, but the Government has made clear it doesn’t have the money to allocate to Royal Mail ahead of schools and hospitals. Access to the capital markets will allow us to be more nimble to seize the opportunities available to us.
What private ownership of Royal Mail means for our employees, our customers and the communities we serve is as follows:
For more information visit the Privatisation section on this website.
Mish Tullar on 07423 524154
Candice Macdonald on 07436 267324
Beth Longcroft on 07435 768549
Shane O’Riordain on 07770 544585
The Free Shares scheme will have the following terms to promote its longevity, ensure that employees can own shares in the most tax advantaged manner possible and to align employee engagement with that of Royal Mail:
• in accordance with HMRC Share Incentive Plan rules, employees will be required to hold the shares for at least three years through a specially appointed trustee. Full tax benefits are only available if the shares are held for at least five years or for ‘good leavers’;
• shares will be forfeited if the employee leaves Royal Mail within three years of their award. This will not apply to ‘good leavers’ whose shares will vest tax-free upon departure;
• shares will be allocated to full time employees equally, regardless of grade or pay levels. The allocation will be pro-rated for part time employees based on an employee’s paid hours to differentiate between full and part time workers; and
• to be entitled to shares, employees must have been employed by Royal Mail for a qualifying period prior to listing.
• Group revenue was £9,279 million, up five per cent (1).
• Group operating profit increased to £403 million(1). The operating profit margin(2) increased from 1.7 per cent to 4.4 per cent.
• Free cash inflow of £334 million was generated, mainly due to our improved trading performance. As a result, net debt decreased by £280 million to £906 million.
• Group parcel revenue increased to £4,477 million, with growth of nine per cent (1).
• UKPIL, which includes the core Royal Mail business in the UK and Parcelforce Worldwide, generated a revenue was £7,766 million, up six per cent(1) and operating profit of £331 million. Its operating profit margin increased from 0.5 per cent to 3.9 per cent (1).
• UKPIL parcel revenue increased by 13 per cent and volumes increased five per cent (1).
• Within UKPIL, reported letter revenue grew to £4,787 million (including marketing mail), an increase of three per cent (1).
(1) Numbers on an adjusted 52 week basis due to a 53 week year in 2012-13
(2) After modernisation costs, before other exceptional items
About Royal Mail
Royal Mail is the Designated Universal Service Provider in the UK. It delivers an affordable six-day-a-week, one-price-goes-anywhere, postal service to more than 29 million UK addresses. Royal Mail is regulated by Ofcom. Royal Mail Holdings plc is directly owned by HM Government and is the ultimate parent company of Royal Mail Group Limited. The Group operates within the United Kingdom, including a number of subsidiaries, associates and a joint venture. These include Royal Mail, which delivers more than 99 per cent of letters in the UK and has a leading position in the UK parcels sector, and Parcelforce Worldwide, its express parcels business. The Group also has a presence in most European countries, mainly through General Logistics Systems, one of the largest ground-based parcel delivery networks in Europe.
On 1 April 2012, Post Office Limited was transferred from under the ownership of Royal Mail Group Limited to become a direct subsidiary of Royal Mail Holdings plc.
This document is directed at employees of Royal Mail Group Limited only. The information contained in this document does not constitute an offer for sale of securities in the United States, Canada, Australia or Japan or any other jurisdiction and is not for distribution in the United States, Canada, Australia, or Japan or any other jurisdiction where such distribution would be unlawful.
The securities referred to in this document have not been registered, and will not be registered, under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), or under the securities laws of any state or other jurisdiction of the United States and may not be offered or sold in the United States unless they are registered under the U.S. Securities Act or pursuant to an exemption from, or in a transaction not subject to the registration requirements of the U.S. Securities Act. There will be no public offering of securities in the United States.
This document is an advertisement and not a prospectus. Any purchase of securities in any proposed offering should be made solely on the basis of the information contained in the prospectus to be issued by Royal Mail in connection with any such offering which will be published in electronic form and made available to persons resident in the United Kingdom on Royal Mail’s website.
Please note that the value of shares can go down as well as up. There is no guarantee that Royal Mail will float and no one should base any financial decisions on the Government’s flotation plans for Royal Mail at this stage.
Registered Office Royal Mail plc 100 Victoria Embankment London EC4Y 0HQ
© Royal Mail Group Limited 2014