British postal group Consignia – the firm which operates Royal Mail – posted pre-tax losses for its fiscal first half more than double those of a year go.
For the six months to September 23, Consignia’s losses widened year-on-year from £113 million to £281m ($398.5m), mostly due to a write-down of £100m on assets at its cash-burning parcels operation. However, the figures would have made even bleaker reading were it not for a £144m credit resulting from alterations to its pensions accounting standards.
Chairman Neville Bain warned the group could not continue to take such losses at the parcels division: “The urgent need for structural changes in Parcelforce Worldwide is underlined by its continuing cash consumption, which is expected to reach £200m by the end of the year. We are determined to take the action necessary to give Parcelforce Worldwide a profitable future.”
Such statements prompted new concerns over redundancies. Consignia has already vowed to slash costs by £1.2 billion (15%) by 2003, which workers worry will be achieved through job losses – fears heightened further by Bain’s emphasis on the £65m jump in the group’s wage bill.
News source: Financial Times