Royal Mail Delivers £537m Profit

17 May 2005

Britain's Royal Mail Group- monopoly owner of the nation's primary direct mail channel and a major advertiser in its own right - announced today (Tuesday) a barnstorming return to profit and plans for a major profit/share participation plan for its employees.

According to the Financial Times, serial company director Allan Leighton, who is part-time chairman of the postal operator, is pressing for a meeting with government ministers later this week.

His agenda: a partial privatisation of the state-owned postal operator in which staff would gain a stake - a structure similar to that pioneered by retailer John Spedan Lewis back in the 1930s. Seventy years later Lewis's vision, in which all staff are stakeholding 'partners', remains a highly successful but isolated concept, followed by few others.

Leighton, who today unveils a sparkling set of Royal Mail numbers with profits of £537 million ($986.36m; €780.97m), wants to emulate the Lewis model and will lobby the government for permisssion to borrow an additional £2 billion against the state-owned RM's much improved balance sheet.

Part of this sum would be poured into the postal company's pensions black hole, and the balance used to purchase shares from the government for placing in an employee share ownership trust.

Data sourced from Financial Times Online; additional content by WARC staff