Royal Mail now called International Distributions Services

Royal Mail now called International Distributions Services

Royal Mail Group have officially changed their name to International Distributions Services plc. Don’t worry, this doesn’t mean that they’ll be repainting all their vans with new livery – it’s the holding company that’s changed it’s name and International Distributions Services has two divisions – Royal Mail and GLS.

This has serious ramifications down the line as it sets the stage for spinning off GLS and selling the Netherlands based business. That leaves a currently loss making Royal Mail to fend for itself.

This name change was announced in Royal Mail’s Q1 2022/23 Financial Results. The board don’t want to subsidise Royal Mail losses with GLS earnings.

Our intention is to have clearer financial separation with no cross subsidy, reflecting the increased importance of GLS to the group and our position in the wider logistics and distribution markets

– Royal Mail’s Q1 2022/23 Financial Results

The CWU are of course spitting mad at the prospect of Royal Mail standing on it’s own, still loss making, meaning that Posties won’t get massive pay rises and putting the Universal Service in jeapordy.

Royal Mail management has tried to blindside the CWU to directly inform employees that their job security, working standards and union representation is under imminent threat.

– Dave Ward, General Secretary, CWU

Royal Mail, or as we must now call them International Distributions Services, simply don’t care

In the event that significant operational change within Royal Mail in the UK is not achieved, the Board will consider all options to protect the value and prospects of the Group, including separation of the two companies.

– Royal Mail’s Q1 2022/23 Financial Results

There is no immediate danger of a split and sale of GLS – as one industry insider pointed out it’s simply not possible to effectively create an insolvent company which is what would happen if GLS was sold off today. Royal Mail say they lost £1 million per day in the first quarter of their financial year so regulators wouldn’t allow the split….

…however watch for when the strikes are over and the company stabilises because you can pretty much bet the house that as soon as Royal Mail shows a profit International Distributions Services will look to sell of GLS, take their bonuses and share splits, and from then on whatever happens to Royal Mail can be viewed as a Brucie bonus if it turns a profit.

Of course if Royal Mail doesn’t turn a profit and International Distributions Services having sold GLS were to once again turn loss making it would be up to the government to pick up the pieces and fund the universal service. By that time, those that want a quick pay day by selling GLS will be long gone with the aim of being squeaky clean on paper and happy in their well funded retirements or new careers.

0 likes0 dislikes

Comments

This was always the danger when RM was privatised, that they would hive off the profitable bits. Thank you LibDem Vince Cable and the coalition government. And now it is coming to pass... On top of the postal strikes this addsire uncertainty to small businesses already struggling.

Stigmas • 7th October 2022 •

I would say the RM needs to be renationalised but don't want to be accused of being "anti growth". Growth means selling everything off, slash and burn short term thinking... asset strip everything then move on to the next thing. That said, I wouldn't mind third-world services if we weren't paying 1st world prices. Though I always hop and off trains without paying a fare, they can go F themselves. Why should I pay so that pensioners in Holland can get subsidised train journeys? It is a joke.

Mike • 7th October 2022 •