Royal Mail share price: Group makes improved offer to Unite

Royal Mail Group (LON:RMG) has made an improved offer to trade union Unite, the privatised postal operator has said. The move comes after the FTSE 100 company’s row with its Unite-represented managers intensified earlier this month, with nearly 5,000 staff ramping up industrial action after failing to agree a pay deal with the company.

Royal Mail’s share price surged on Friday, gaining 2.01 percent to close at 532.50p, outperforming the benchmark FTSE 100 index which added 5.14 points to close 0.08 percent higher at 6,270.79. The group’s shares have gained 1.62 percent over the past year, and are up just under 20 percent in the year-to-date.
Royal Mail announced in a short statement on Friday that following further detailed discussions with Unite, it had “made an improved offer and committed to further talks going forward”. The postal operator noted that it had committed to a two-day meeting starting next Monday, June 6, “to address a list of concerns and challenges from Unite on terms and conditions, ways of working and learning and development”.

Royal Mail noted that on the basis of further talks, Unite had cancelled the strike action planned for May 31 and June 1. The move comes after the trade union urged the group to make an improved pay offer to staff and resolve an industrial dispute as the company posted a rise UK profits for the year ending March 27.
In a separate development, the Financial Times quoted analysts as commenting on Royal Mail’s several acquisitions since the start last year, from a mobile fashion app to a start-up selling software for online retailers in China.
“They’re buying innovative software and expertise,” Robin Byde, analyst at Cantor Fitzgerald, told the newspaper. “It all speaks to the issue of declining core mail but is also a response to growing ecommerce flows. They’re positioning themselves in the plumbing space for the global supply chain.”
The analyst estimates that the new additions could contribute about £100 million in sales in two years, against current turnover of £9.3 billion.
“The revenue from these acquisitions is going to be fairly marginal for some time,” Byde pointed out. “It’s about how they can apply that technology to their existing businesses and customer base.”
As of 10:38 BST, Monday, 30 May, Royal Mail share price is 532.50p.