We need to be on the same ship

The Czech billionaire behind the £3.6 billion takeover of the owner of Royal Mail has called on workers to be “on the same ship” for the 500-year-old business to succeed.

In an internal memo to staff, coinciding with Royal Mail reaching an agreement with unions on pay at the weekend, Daniel Kretinsky said: “We recognise the importance of working together with our trade unions to ensure a successful future for Royal Mail and a fresh start for our industrial relations.”

Under its previous management, Royal Mail was weakened by a bitter industrial dispute that had featured 18 days of strikes over pay and conditions. The breakdown left workers “disengaged” and the company, which has been expanding in parcels amid the long-term decline in letters, losing more than £1 million a day.

EP Group, a conglomerate controlled by Kretinsky, completed an audacious 370p-a-share takeover of International Distribution Services (IDS) in May after agreeing undertakings with ministers, including issuing a so-called golden share to the government, as well as reaching an agreement with the Communication Workers Union, representing frontline Royal Mail workers.

Following on from that agreement in December, union bosses told members on Sunday that a deal on pay had now been reached.

“If it is endorsed by the postal executive we will share the full details of the agreement as part of an extensive communications exercise ahead of a full members ballot,” Dave Ward, the general secretary, said.

Ward has previously said “the status quo is not tenable” and that the government’s “golden share” had given the union “more confidence to go ahead with the agreement”.

Kretinsky, who has invested fortunes raised from European energy assets in food, media, logistics and sports, including stakes in J Sainsbury and West Ham United football club, has installed himself as chairman, replacing Keith Williams, the former IDS chairman, who left the company in June.

Emma Gilthorpe has been replaced as chief executive of Royal Mail by Alistair Cochrane, who has been promoted from his role as chief operating officer.

Associates of Kretinsky have also been appointed to the board. Jiri Zrust, a fellow Czech who is a senior logistics executive at Trafigura, the commodities group, has been appointed as an independent non-executive director.

Greg Hands, a former Conservative trade minister, has been appointed as a strategic adviser to EP Group, which is based in Prague.

In his memo to staff, Kretinsky said he was committed to “working jointly” with CWU and Unite, which “underlines what I have said from the very beginning of this process: we all need to be ‘on the same ship’ because if Royal Mail succeeds, we will all benefit”.

Kretinsky reiterated that EP Group were “committed investors and partners and believe the pathway to success lies in taking a truly long-term view of the future”.

“Despite a very challenging market environment, the difficult financial situation for Royal Mail and ongoing uncertainty about desired universal service regulatory changes, we have offered CWU a three-year pay deal, with greater job security.”

He said Royal Mail had “strengths that no other company can match, such as our brand heritage and our beloved posties”.

IDS also owns GLS, a more successful parcel business that operates across Europe and North America. Krestinsky is understood to be focused on expanding GLS.