Risk report so thick it could destroy your coffee table
Jim Armitage is the City editor of The Independent and London Evening Standard group of newspapers. He has been a reporter and editor for more than 20 years and was recently shortlisted for the Press Gazette financial journalist of the year and The Society of Editors financial journalist of the year awards. He contributes news, investigative reports and comment to the Independent titles plus a daily column in the Evening Standard.
Saturday 28 September 2013
You know a flotation is not necessarily the safest investment when the investment prospectus could wedge a door open.
Royal Mail’s, weighing in at 445 pages, is one such.
The well-paid lawyers at Slaughter and May have certainly earned their corn. The thickness of the document is mainly down to the panoply of risks attached to investing in a complex utility in a rapidly changing market.
Page after page is devoted to the propensity of posties to get bitten by dogs, to outbreaks of disease, worsening traffic congestion, major IT failures, even a nasty-looking dispute over a e10m bill to the Italian taxman.
But by a long chalk, it is the likelihood, nay inevitability, of industrial unrest that takes up the bulk of the risk report.
Investors must be completely aware that, as well as the strike already being planned by the union next month, industrial action is likely over a whole host of other money-saving and “productivity” initiatives being planned at the post-float Royal Mail.
The company has more than 80 national collective bargaining agreements with unions on a wide range of operational issues, so there is always a risk of performance- destroying industrial action at a local or countrywide level.
That, the company says, presents a potential threat to many of the measures it is proposing through its Transformation project.
This is one of the most unionised organisations in the country, with around 80 per cent of its operational and administrative staff being members of the Communications Workers Union and 40% of managers in Unite.
The message: investors beware.
- 1 What marriage would look like if we actually followed the Bible
- 2 If these extraordinarily powerful images of a dead Syrian child washed up on a beach don't change Europe's attitude to refugees, what will?
- 3 The Chinese city where men have 'three girlfriends because there are so many women'
- 4 'Heartbreaking' Syria orphan photo wasn't taken in Syria and not of orphan
- 5 Orthorexia nervosa: How becoming obsessed with healthy eating can lead to malnutrition
Britain to take more refugees as Cameron bows to pressure after more than 250,000 back our campaign
Senior British politicians tell David Cameron: When dead children are being washed up on beaches – it's time to act
Jeremy Corbyn calls Osama bin Laden's killing a 'tragedy' - but was it taken out of context?
If these extraordinarily powerful images of a dead Syrian child washed up on a beach don't change Europe's attitude to refugees, what will?
If you're not already angry about the refugee crisis, here's a history lesson to remind you why you really should be
Make your voice heard: Sign The Independent's petition to welcome refugees
iJobs Money & Business
£16000 - £40000 per annum: Recruitment Genius: A Foreign Exchange Dealer is re...
£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...
£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...
£14000 - £16000 per annum: Recruitment Genius: This company was established in...