International Distributions Services Plc shares jumped the most in four months after Royal Mail reached an agreement in principle with the Communication Workers Union following a year-long dispute over pay.
(Bloomberg) — International Distributions Services Plc shares jumped the most in four months after Royal Mail reached an agreement in principle with the Communication Workers Union following a year-long dispute over pay.
Parent company IDS rose as much as 7.5% in early trading after the deal was announced in a joint statement at the weekend. The pact brings relief for investors as the standoff has hindered attempts to make 500-year-old Royal Mail more efficient through automation and flexible shift patterns. Strikes have also put the company’s share of the UK parcel market at risk.
Monday’s rise trimmed IDS’s one-year decline to about 25%. However, details of the agreement have not yet been revealed, and Gerald Khoo, an analyst at Liberum Capital Ltd., cautioned that the company may have had to make significant concessions.
“We don’t yet know what Royal Mail has had to concede to get an agreement with the union,” he said in written comments. Meanwhile, the protracted dispute has created “animosity,” which may still harm efforts to improve efficiency, said Khoo.
IDS was up 5.4% to 244 pence shortly before midday in London. The stock is down about 60% since a June 2021 high when it was boosted by a boom in deliveries of goods bought online during Covid-19 lockdowns.
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