Shareholder Executive
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Board Members 2007-08
Chair
Allan Leighton
Executives
Adam Crozier
Group Chief Executive
Ian Duncan
Group Finance Director
Mark Higson
Managing Director, Royal Mail Letters
Alan Cook CBE
Managing Director, Post Office Ltd
Non-Executives
Richard Handover CBE
Senior Independent Director
David Fish
Baroness Margaret Prosser
Helen Weir
Shareholder Executive lead official
Susannah Storey
E-mail: susannah.storey@
berr.gsi.gov.uk
Shareholder Executive role
Executive
Royal Mail 
Purpose
Royal Mail is the leading postal service operator in the UK, providing national and international distribution of mail and parcels, operating under a licence from the regulator, Postcomm. In addition to its regulated Royal Mail branded mails business, its operating units are: Post Office Limited (POL), providing Government, financial and retail services through its network of branches; Parcelforce Worldwide, domestic and international express parcels business; and General Logistics Systems (GLS), parcels business in 36 European countries.
Legal Status and Ownership details
The Government owns 100% of Royal Mail Holdings plc's shares. The Secretary of State for BERR owns 50,004 ordinary shares plus 1 special share and the Treasury Solicitor holds 1 ordinary share. The special share relates to areas where special shareholder consent is required, including major transactions, board appointments/remuneration and borrowing.
Government's Objectives
- to ensure provision of the universal postal service in the UK
- to ensure the publicly owned Royal Mail Group is fully restored to good health, providing market leading quality of service to customers and rewarding employment to its people
- Royal Mail to be best-in-class postal service provider with robust, sustainable business health
- delivery of Government and other services effectively through an efficient and appropriately structured post office network.
Financial Performance
| £m | 2008 | 2007 | 2006 |
|---|---|---|---|
| Turnover | 9,388 | 9,179 | 9,056 |
| Operating Profit | 115 | 194 | 323 |
| Profit/(Loss) for the year | 135 | 286 | 395 |
| Net Cash flow | 209 | 35 | (179) |
| Net Operating Assets | 3,199 | 3,275 | 1,224 |
| RONA | 3.6% | 5.9% | 26.4% |
| Shareholders' Funds - Liabilities | (241) | (2,264) | (3,339) |
| Dividends | - | - | - |
Commentary
Group operating profits before exceptional items fell by around one third to £162m (2006-07: £233m) and the letters business made a loss of £3m (2006-07: £136m profit). These figures underline the challenges facing Royal Mail, in the form of falling letters volumes (down 3.2%) due to changes in the way people communicate, increased competition, the need to modernise and high pension costs. Quality of service was badly affected by a series of strikes in 2007.

The main contributor to profits was again GLS with operating profits of £114m (2006-07: £115m) despite operational difficulties in France and increased competition in Germany, but benefiting from a strong euro. Parcelforce's profits were up 14.3% at £8m in a market with increasing competitive pressures.
Post Office Limited saw a decrease in losses (down to £34m). However after adjusting for the impact of the social network payment of £150m (2006-07 £75m) from Government the underlying losses were stable and revenues showed a slight downward trend.

In May 2007 the Government announced investment of up to £1.7bn to 2011 to support the post office network. It also published its response to a 12 week national public consultation which covered a range of proposed measures to modernise and reshape the network and put it on a more stable footing. As a result POL has now put in place a Network Change Programme, involving the compulsory compensated closure of up to 2500 branches, replacing around 500 of these with 'Outreach' type service points. The programme started in May 2007 and will be completed over a 12 to 18 month period.
In December 2007, the Government announced an independent review of the postal services market. The Review Panel, chaired by Richard Hooper, will assess the impacts of liberalisation, explore trends in future market development and consider how the universal postal service can be maintained in an increasingly competitive market. The Review is expected to report back to Government towards the latter part of 2008.
During the year, Tony McCarthy, David Burden, Ian Griffi ths, John Neill, Mike Hodgkinson and Stephen Carter left the Board and Mark Higson joined in November 2007.