Looking ahead

Changes in communications and commerce, driven by the internet, mean our business is changing.

We’re ready to grow in the UK. We have a lot of strengths, including our brand, our scale and our joint delivery of parcels and letters in the UK. But it’s our people, who are our major asset.

In this month’s special-edition of Courier, Group CEO, Rico Back, and chief operating officer and chief finance officer, Stuart Simpson, answer your questions on why we must transform.

Why are we cutting the dividend?

‘We really appreciate the support of our shareholders, including many of our people who received Free Shares,’ said Rico. ‘We understand the importance of the dividend to them, and I can assure you it’s not a decision that we have taken lightly. We have tried to strike the right balance between shareholder returns and investment in the UK network.

‘Our plan supports the long-term sustainability of our business. And, ultimately, that’s the right thing to do for all our stakeholders.’

Will there be any job losses as part of the new strategy?

‘We expect that there will be an hour’s reduction of around 3% each year,’ said Stuart. ‘This can be delivered through a combination of activities, like reducing use of agency staff and overtime. We know that change is always difficult and we are committed to working carefully and considerately with our unions and our people.

‘In line with our current agreements, we will continue to deliver change without compulsory redundancies.’

Won’t taking traffic out of the network harm the Universal Service?

‘Absolutely not,’ said Stuart. ‘Our plans actually support a contemporary, sustainable Universal Service. While extending our network will enable us to handle larger parcels more efficiently and effectively, the real benefit for us is that it enhances the already good economics of small parcel handling.

‘It’s also important to remember that the daily combined delivery of letters and parcels via our core network will continue as it is now. In fact, as a result of our plan, we expect the volume of parcels we deliver alongside letters to increase. It’s a 'win-win' for us.

‘Secondly, the continued decline in letter volumes means we have to align ourselves with growing areas of the parcels market. Both USO and non-USO mail pays for the Universal Service.’