About 140,000 postal workers now eligible to sell shares they were given at privatisation
Royal Mail staff selling their shares on Monday lost about £850 each after a profit warning a fortnight ago sparked a sharp fall in the share price.
About 140,000 postal staff have been waiting to sell the free shares they received when the company was privatised five years ago. Monday was the first day they could sell without paying tax or national insurance.
The shares have lost nearly 30% of their value since Royal Mail shocked the City with a profit warning on 1 October and are now trading at 338p, just above the flotation price of 330p. They were standing at 477p before the profits warning, compared with a peak of 631p reached in May.
Postal workers were awarded 613 shares when the company floated in 2013. Most employees held on to them to avoid the tax bill that selling before the fifth anniversary would have triggered. Those shares were worth £2,072 on Monday, compared with £2,924 before the profit warning.
The profit warning came just days after management wrote to employees asking them if they wanted to pre-register to sell their shares on Monday.
Some Royal Mail staff have accused the company of deliberately issuing a profit warning less than a fortnight before many were planning to sell their holdings. Des Arthur, a postman from Coventry, told the BBC the timing of the profit warning “could be viewed as extremely cynical”.
The company said it understood employees’ disappointment but added that it had no choice but to update the market on 1 October. Under stock market rules, UK companies have to notify the market without delay of any changes in their trading performance that could lead to a substantial share price movement. Royal Mail said that anyone who pre-registered to sell their shares before that date was able to cancel the sale.
Some employees said the fall in the share price had forced them to cancel holidays and disrupted other spending plans or debt repayments. Mike Beckerleg, a postal worker in Cornwall, said earlier this month that Royal Mail staff had suffered “a considerable loss”. Some said they would hold on to their shares in the hope that the price would go up again.
A Royal Mail spokesperson said: “We were very disappointed that we had to issue a trading update last week. We know and understand this is disappointing for those colleagues who had been planning to sell some of their free shares. But we have to comply with stock market disclosure rules, which required us to make an announcement as soon as possible.”
