La Poste announces changes with the sale of its telecoms branch | Economic news

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The Post is in talks to get rid of its telecoms branch and is considering selling its insurance business as its new CEO puts his mark on the centuries-old institution.

Sky News has learned that the government firm has appointed bankers to oversee and auction its telecommunications division, which has 500,000 customers and an annual turnover of around £ 150million.

City sources said on Friday that PJT Partners, the investment bank, had been hired to organize the auction, which is expected to cost more than £ 100million, following a number of expressions of interest unsolicited.

They added that a sale would only proceed if a satisfactory price was obtained.

Another firm in the city, Fenchurch Advisory Partners, has been appointed separately to conduct a strategic review of the Post’s insurance division.

The insurance industry is a regulated intermediary with approximately 300,000 clients, primarily in travel, home, automotive and protection products.

The prospective divestitures of both operations follow a comprehensive review of the company led by Nick Read, who joined La Poste as chief executive last year.

Mr Read’s appointment came amid a growing row over the multi-million pound scandal that resulted in a number of his deputy postmasters – or branch managers – being wrongly sent to prison.

The crisis led the Post to agree last December to pay nearly £ 58million to settle a lawsuit brought by a group of 550 deputy postmasters.

At the time, the network, which has around 11,500 branches across Britain, apologized, with Mr Read’s predecessor Paula Vennells the target of particularly fierce criticism over his handling of the problem.

In May, the Post launched a program to provide redress to current and former postmasters who were not part of the dispute resolution but who believe they have been harmed by earlier versions of the Horizon computer system.

The company is now committed to appointing for the first time one of its army of postmasters to its board of directors – a move that has been endorsed by UK Government Investments (UKGI), the agency that oversees the interest of taxpayers in it.

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The post office is separate from Royal Mail but the couple have a close working relationship

A source said the move was “an olive branch” of Mr Read as he tried to mend relations with the Post’s stakeholders.

Those relations were strained by a scandal involving the use of a faulty computer system called Horizon, which has led some agency managers to be wrongly accused of theft, fraud and false accounting.

Mr Read, who previously led the Nisa convenience store group, joined the post almost a year ago.

Its decision to explore a sale of the telecoms and insurance divisions will allow the company to focus on handling mail and parcels, as well as providing cash and banking services, according to an insider.

The Post Office is a completely separate company from Royal Mail Group, which was privatized in 2013 and listed on the London Stock Exchange.

However, the two companies maintain a close commercial relationship, with the negotiation of a new ten-year agreement between them among the priorities of Mr. Read.

As with other physical retailers, the coronavirus pandemic provided a rigorous test for the management of the post.

More than 90% of its branches remained open during the crisis, and the network made a number of guaranteed hardship payments to postmasters in April and May.

The Post has also reallocated some of its currency cash delivery business to enable overnight delivery of sterling cash to meet demand.

Other main targets for the CEO over the next year will include setting up a renewed partnership with major UK banks and real estate companies, while travel and bill payment services are also expected to benefit from investments substantial.

A spokesperson for the post declined to comment on Friday.

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