Royal Mail posts £1bn loss after year of strifeRoyal Mail has reported a loss of over one billion pounds, after a year hit by strikes and poor delivery performance.
Parent company International Distributions Services has reported that Royal Mail made a loss of £1.044bn in the year to March, down from a profit of £250m a year earlier.
IDS says Royal Mail was hit by industrial action, with workers holding a string of strikes in the last year in a bitter dispute over pay and conditions.
IDS blames Royal Mail’s inability to deliver “the in-year benefits of planned productivity improvements”.
Weaker online shopping, and a drop in volumes of Covid-19 kits, also hit Royal Mail’s earnings compared with a year ago.
IDS warns that the UK’s Universal Service Obligation (USO) – which requires Royal Mail to deliver letters six days a week to every address in the land if necessary – “requires major reform”.
It tells shareholders this morning:
We urge the Government to work with us to protect the long-term sustainability of the one-price-goes-anywhere Universal Service.
Earlier this week, communications regulator Ofcom launched an investigation into poor performance at Royal Mail that could lead to a fine. after more than a quarter of first-class mail was not delivered on time.
Earlier this year, a cyber attack forced Royal Mail to temporarily suspend international parcel and letter deliveries through Post Office branches for several weeks.
The company’s international parcels business, GLS, made an operating profit of £296m, down 9.5%, today’s financial results show.
But overall, IDS has made a loss of £748m, down from a £577m profit the year earlier.
Last week, Royal Mail’s CEO Simon Thompson quit, after the acrimonious tussle with unions, but will stay on until the end of October.
On an adjusted basis, Royal Mail made an operating loss of £419m, beating market expectations according to Reuters.