Employees of the Royal Mail Group (LON:RMG) have supported an agreement on wages and pensions, said the privatized postal operator. The move came after the company reached an agreement with the Communications Workers Union (CWU) earlier this year after months of negotiations after the company presented plans to replace its defined benefit pension scheme with a cheaper alternative.
Royal Mail’s share price rose at today’s meeting in London, up 0.71 per cent to 539.60 pence (10:25 BST). The Group’s shares contributed more than 28 per cent to its value last year and helped the company return to the FTSE 100 benchmark index following the recent quarterly reshuffle of the Footsie.
Back pay and pension agreements
The CWU announced in a statement yesterday that postal workers voted by an “overwhelming majority” to accept the union’s agreement reached in talks with Royal Mail on wages, pensions and working conditions. CWU members voted nine to one in favor of the agreement.
“The agreement also extends the legally binding safeguards, which gives postal workers confidence that Royal Mail Group will not be dissolved and that the protection of the six-day Universal Service Obligation (USO) will remain a priority,” commented Terry Pullinger, Deputy Secretary General (Post) of the CWU, in the statement.
Royal Mail made a brief statement, noting that it was “pleased” with the outcome of the vote.
Analysts on the postal operator
The 16 analysts offering 12 month price targets for Royal Mail in the Financial Times have an average price target of 495.00 pence for the shares, with the high estimate at 605.00 pence and the low estimate at 300.00 pence. As at March 23rd, the consensus forecast of the 18 investment analysts surveyed covering the blue chip group advises investors to maintain their position in the company.
At 10.52am BST on Thursday 29 March, Royal Mail’s share price was 512.75 pence.