The threat of a mass walkout by Royal Mail Group (LON:RMG) workers is diminishing after a ‘philosophical agreement’ was struck between the postal operator and the Communication Workers Union (CWU), City A.M. has revealed. The London-listed group has been trying to reach an agreement with workers over its plans to replace its defined benefit pension scheme with a less costly alternative.
Royal Mail’s share price has been subdued in London in today’s session, having given up 0.35 percent to 431.20p as of 14:04 GMT, marginally underperforming the broader UK market, with the mid-cap FTSE 250 index currently standing 0.15 percent at 19,840.91 points in the red, pressured by a hefty fall in cruises-to-insurance group Saga (LON:SAGA). The postal operator’s shares have lost more than seven percent of their value this year.
Strike threat diminishing
City A.M. reported yesterday that the CWU deputy general secretary Terry Pullinger said in a short video this evening there had been a ‘fundamental change’ during the latest round of talks with Royal Mail.
“I feel that the conversation now is in a fundamentally far better than it was before we balloted,” he pointed out, as quoted by the newswire. “So as we sit here today we have, I think, a far more philosophical agreement with the employer.”
The mid-cap group has been looking to avert a walkout by postal workers, with the CWU having threatened industrial action over the proposed changes to the group’s pension plan. In October, Royal Mail won an injunction in London’s High Court last week, preventing an upcoming strike.
Royal Bank of Canada reiterated its ‘sector performer’ rating on Royal Mail yesterday, valuing the shares at 445p. According to MarketBeat, the company currently has a consensus ‘hold’ rating and an average price target of 424.38p.