International Distributions Services PLC (IDS)

[Itsallaguess]

Pretty much an uninvestable company I'd say!

I agree, from an operational point of view and the presence of a unionised workforce with ridiculous working practices like this. The employee cost alone is so large that a significant inflationary wage rise could pretty much wipe out profit. This is why the 50% gross margin reduces to a 5% or less operating margin even in good times.

However, it’s not without value as an investment since it trades at a significant discount to TBV. You’re currently getting £6.7bn of net fixed assets for a market cap of £2.6bn.

I think some of that asset-discrepancy might be explained in the linked Telegraph report -

Automated but unused -

A brief tour of the Mount Pleasant site, once the biggest sorting office in the world, reveals some of Royal Mail’s working practices conundrum.

There is an all-electric fleet of postal vans awaiting deliveries. Yet one floor up, every single parcel is sorted by hand. In a seemingly paradoxical situation, every parcel delivered in London leaves in a state-of-the-art zero emissions vehicle, while automatic sorting machines lie fallow.

Mount Pleasant has one such machine which will process between 6,000 and 7,000 parcels per hour but it is yet to be plugged in.

Every tiny change must be cleared by the unions – and this machine will put 30 people out of work, Thompson explains.

https://www.telegraph.co.uk/business/2022/07/16/royal-mail-union-demands-2850-week-staff-push-one-button/

It looks like the Post Office unions won't be happy until they've forced themselves and their membership out of a job.

What a shower...

Cheers,

Itsallaguess

[scrumpyjack]

Yet another demonstration of the evil influence of trade unions on the country. Occasionally they may do a tiny bit of good, but overall - ugh!

I came across many many examples of this sort of thing in my career.

[idpickering]

Q1 Trading Update.

· Revenue down 11.5% year on year in the first quarter, reflecting weakening retail trends, lower test kit volumes and a return to structural decline in letters

· Adjusted operating loss of £92 million, reflecting inflexibility in the cost base to adjust to lower volumes and disappointing performance on delivery of further efficiencies

· Progress on Pathway to Change stalled, creating £100 million risk to £350 million of benefits identified for FY 2022-23; other cost saving programmes on track, albeit with headwinds from recent increases in absence due to COVID-19

· Q1 performance emphasises the need to act now to make the most of our new infrastructure, find more flexible ways of matching resource to workload and ensure we have a more agile and sustainable relationship with the CWU

· Now moving ahead with actions where we do not need further union agreement, notably revisions and Scan-in Scan-out (SISO) in Delivery

· Outlook for FY 2022-23: weaker parcels market and lower than anticipated efficiency savings in-year. Provided progress can be made on above actions, now likely to be around breakeven at adjusted operating profit level, excluding any impact from industrial action.

https://www.investegate.co.uk/royal-mai ... 00080525T/

Ian.

[idpickering]

UPDATE ON INDUSTRIAL RELATIONS IN ROYAL MAIL.

Royal Mail is today providing an update on industrial relations. After five months of talks, including three dispute resolution procedures, no agreement has been reached with the Communication Workers Union (CWU).

As previously announced, Royal Mail made a loss of £92 million in the first quarter, equivalent to approximately £1 million a day. Royal Mail needs to adapt much faster to adapt to changing customer demands in a highly competitive market. The CWU has blocked any meaningful discussion on the change agenda the company has set out, and has not put forward any viable alternatives that will fund further pay increases.

Given the lack of progress made, and the ongoing damaging impact of industrial action on the business and customers, Royal Mail has today taken two steps to break the impasse and ensure it can move ahead with its transformation at pace:

· Firstly, Royal Mail has written to CWU to propose that talks should be taken to Acas (the Advisory, Conciliation and Arbitration Service) in a further attempt to find a resolution.

· Secondly, Royal Mail has informed CWU that it wants to modernise the ways of working with them. As part of this, Royal Mail will review or serve notice on a number of historic agreements and policies which are currently being used by the CWU to frustrate transformation, and intends to move to a more modern industrial relations framework designed to make the business more agile, and able to compete more effectively.

https://www.investegate.co.uk/royal-mai ... 41223036A/

Ian.

[idpickering]

Royal Mail plc change of name.

Change of name to International Distributions Services plc

The Company today confirms its name has changed from Royal Mail plc to International Distributions Services plc.

The Company announced the decision to change its name to International Distributions Services plc on 20 July 2022 together with its first quarter 2022 results. This change has now taken effect.

Shareholders should note that their shareholdings will be unaffected by the change of name. Existing share certificates should be retained as they will remain valid for all purposes and no new share certificates will be issued.

The Company's stock market TIDM will become "IDS" from 8:00 am (UK time) on 5 October 2022. Our ISIN, SEDOL, and CUSIPs will remain unchanged. The Company's Legal Entity Identifier (LEI) remains 213800TCZZU84G8Z2M70 .

https://www.investegate.co.uk/royal-mai ... 00026914B/

Post reported to Mods for their possible action re company name change in relation to this board.

Moderator Message:
Changed for now to "International Distributions Services (IDS) was Royal Mail"
Once everyone gets used to the new name, we'll wipe the Royal Mail bit
Gryffron

Ian.

[idpickering]

Royal Mail could axe 10,000 full-time staff next year as losses tumble to £350million amid ongoing strike action by workers over pay dispute.

Up to 10,000 Royal Mail jobs are under threat, parent group International Distribution Services has admitted this morning.

The company said it expects a full year adjusted operating loss to tumble to £350m.

It includes the direct, immediate impact of eight days of industrial action which have taken place or been notified to Royal Mail, but excluding any charges for voluntary redundancy costs.

https://www.dailymail.co.uk/news/articl ... llion.html

Ian.

[idpickering]

Royal Mail Trading Update and Revised Outlook.

Key Points:

· Royal Mail H1 2022-23 adjusted operating loss of £219 million (2021-22: £235 million profit), including around £70 million of direct negative impacts from 3 days of industrial action;

· Royal Mail trading cash outflow in H1 of £274 million1 (2021-22: £114 million inflow). On a pre-IFRS16 basis it was a £330 million1 outflow (2021-22: £64 million inflow);

· We will be starting the process of consulting on rightsizing the business in response to the impact of industrial action, delays in delivering agreed productivity improvements and lower parcel volumes:

o Short-term cost efficiencies being achieved through an estimated reduction of around 5,000 full time equivalent operational roles (FTEs) by March 20232 and c.10,000 by end of August 20232 (on a rolling 12 month basis);

o Based on current estimates, c.5,000-6,000 redundancies may be required by end of August 2023.

· Royal Mail full year estimate: expected full year adjusted operating loss of around £350 million, including the direct, immediate impact of eight days of industrial action which have taken place or been notified to Royal Mail, but excluding any charges for voluntary redundancy costs. This may increase to around a £450 million loss if customers move volume away for longer periods following the initial disruption;

· Communication Workers Union (CWU) has threatened, but not yet formally notified Royal Mail, of a further 16 days of strikes in November and December. If these take place, the loss for the full year would increase materially and may necessitate further operational restructuring and headcount reduction;

· The ongoing uncertainty means that the Board is unable to give a clear outlook for the full year. Additionally, this situation may lead to an impairment of the carrying value of the Royal Mail business when H1 results are published on 17 November;

· Royal Mail urges CWU to immediately call off planned strike action and embrace our offer of Acas talks to urgently find a resolution to the current dispute.

The position of Royal Mail has deteriorated due to a combination of the impact of the industrial dispute, an inability to deliver the joint productivity improvements agreed with CWU under the Pathway to Change agreement, and ongoing macro-economic headwinds. Although action was taken in H1 to lower labour costs, the business was unable to reduce costs quickly enough in line with deteriorating parcel volumes.

https://www.investegate.co.uk/intnl.dis ... 00048773C/

Ian.

[SPURLEY]

I worked in engineering in the late 70`s and slowly but surely our manual machines were replaced by CNC machines , most of the women operators were made redundant or moved to other roles . Its called progress , and a lot more productive . That was a long time ago . The unions probably think Rowland Hill is still around.

[idpickering]

Q3 Trading Update.

Royal Mail:

· Revenue down 12.8% year on year in the nine-month period. Performance continues to be driven by a return to structural decline in letters, weaker retail trends, the impact of industrial disruption (18 strike days year to date), and lower test kit volumes;

· Total letter revenue declined 6.1% year on year, with volumes for addressed letters excluding elections down 8%;

o Compared to pre-pandemic levels (9M 2019-20) addressed letter volumes (excluding elections) were down 25% and total letter revenue down 14.0%, reflecting the fundamental change in volume and revenue mix - parcels now 54% of total revenue vs. 48% pre-pandemic - highlighting the urgent need to deliver change;

· Total parcel revenue reduced by 17.8% year on year, with volumes down 20% (revenue growth of 8.6% and volume decline of 6% vs. pre-pandemic 9M 2019-20);

· Year to date adjusted operating loss of £295 million. Net cost of strike action in the nine-month period estimated at c. £200 million;

· Five-point plan to stabilise the business making good progress and on track;

· Number of voluntary redundancies required to achieve the 10,000 FTE (Full Time Equivalent) reduction by August 2023 will be significantly lower than the 5,000-6,000 communicated in October as a result of strong performance in reducing variable FTE resource and current levels of attrition. On track for 5,000 FTE reduction by March 2023. No compulsory redundancies.

· Effective contingency measures: despite seven days of industrial action in December, robust contingency planning meant in excess of 110 million parcels and over 600 million addressed letters delivered. Up to c. 12,500 CWU grade employees returned to work on strike days.

GLS:

· Volume declined 2% year on year in the nine months; revenue growth of 9.7% in Sterling, 9.6% in Euros (including acquisitions and working day effects)1, continuing to benefit from better pricing and higher freight revenues;

· Adjusted operating margin for the nine months 7.5%, 100 bps below prior year;

· Continued robust performance against challenging macro-economic backdrop. Revenue growth in almost all markets, but continued cost pressures, being partly offset by a combination of specific pricing actions, service quality and targeted efficiency measures.

https://www.investegate.co.uk/intnl.dis ... 00058916N/

Ian. No holding.

[idpickering]

Q3 Trading Update

https://www.investegate.co.uk/announcem ... e-/7994763

Ian.