The Royal Mail share price, now known as International Distributions Services PLC (LON: IDS), was trading up 3.28% for the year after yesterday’s significant retracements that eroded much of the gains made since the year began.
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Royal Mail (IDS) shares have been inching higher since bottoming in mid-December despite the strikes organised just before Christmas. Investors were expecting to see the strikes continue in 2023 as the stand-off between Royal Mail and the Communication Workers Union (CWU) continues.
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However, many were pleasantly surprised when Royal Mail and the CWU agreed to resume talks facilities through Acas to reach agreement. The talks began on Monday, January 9, 2023, and will end on Friday, January 20, 2023.
Royal Mail shareholders and customers alike are hoping that the task shall result in the signing of an agreement that will eliminate the constant threat of industrial action by the CWU so that both sides can work on growing the company’s business.
The company’s current management was recently criticised by former CEO Rico Back, who said the firm wasted a perfect opportunity to change its operating model during the pandemic lockdowns. He pointed out that the pandemic period was the right opportunity to implement operational changes.
Rico also faulted the company for returning £400 million to shareholders in late 2021, saying the monies could have been used to fund its turnaround plan and compensate employees. The former CEO also criticised the current CEO, Simon Thompson, for lacking adequate experience managing such a large firm.
Before jumping to conclusions, we must remember that Rico Back, the former CEO, also ran into massive issues with the CWU as he attempted to implement a £1.8 billion turnaround plan at Royal Mail. His comments seem more like the kettle calling the pot black.
As for Simon Thompson, while he might have been wrong in returning the £400 million to shareholders in 2021, his strict approach to the CWU might work, given that the workers union has been standing in the way of change at Royal Mail for years.
However, Royal Mail has run out of time and must change to survive. I hope the CWU now realises that change is inevitable.
*This is not investment advice.
Royal Mail (IDS) share price chart.
The Royal Mail (IDS) share price is trading up 3.28% for the year after yesterday’s massive decline.
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.