Home ›› 18 Apr 2023 ›› World Biz
Shares in Royal Mail’s parent group rallied Monday after the UK postal operator clinched a deal with union leaders to end a long-running dispute over pay, jobs and conditions.
The share price of International Distributions Services (IDS) jumped about five percent to 243 pence in early afternoon London deals as investors welcomed the news.
Royal Mail and the Communication Workers’ Union (CWU) said Saturday that they have reached a provisional agreement over strikes that had sparked huge losses at the postal firm.
Britain’s private and public sectors have faced industrial action as workers protest at wages that have failed to keep pace with elevated inflation, which remains above 10 percent.
The nation faced fresh walkouts Monday by staff at energy regulator Ofgem, the Passport Office and driving test centres.
“After almost a year of talks, Royal Mail and the CWU are pleased to announce they have reached a negotiators’ agreement in principle,” the Royal Mail and CWU said in a joint statement on Saturday.
“The proposed agreement will now be considered by the executive of the union before being voted on by the union’s membership.”
IDS revealed last month that it had slumped into a vast operating loss of £300 million ($363 million) in the nine months to December, after taking a hit of £200 million from the strikes.
Interactive Investor head of investment Victoria Scholar said the weekend pay deal “marks an end to the period of heightened uncertainty for the group”.
The firm’s share price had collapsed from a peak of 591 pence in June 2021 to a low of 200 pence late last year, she added.
“Shareholders have had a difficult time with this stock. If the agreement marks an end to the recent strike action, this will be a major win for the company as it looks to shift its workers dispute to the rear-view mirror,” Scholar added.
Former state-run operator Royal Mail was boosted during the Covid pandemic lockdowns by a high volume of parcels, but this has since fallen sharply.
