International Distributions Services, the parent company of Royal Mail, announced that it had posted a loss adjusted for inflation of £419m after a strike-plagued year.
Results showed that the group as a whole, including Royal Mail UK, GLS and its international operations, had an operating loss adjusted of £71million for the year ending March 26. This was compared to a profit of £758million a year ago. Analysts expected a loss around £114 million.
The company stated that the losses suffered by Royal Mail were caused by postal strike over pay, the inability to deliver planned productivity improvements, the lower test kit volume as the pandemic receded, and the weaker online retailing market. The company said that this was “partly offset by” cuts made to the business during the second half.
The Royal Mail parcel and postal company lost more than £200 Million as a result of the 18-day strike by Royal Mail workers that took place between August and December.
Royal Mail reported a loss of £1.04 billion at the statutory level after IDS reduced the value by £539 millions.
IDS has reported an overall pre-tax loss in the amount of £676million, after posting a profit last year of £662million. The company reported a total operating loss of £748 millions. The group’s revenue fell by 5 percent to £12.04 Billion, from £12.7 Billion. The group stated that it aimed to achieve an adjusted operating income in the current financial year.
Since taking the top job in 2021, Thompson has been under pressure over strikes and who accused him of not giving “wholly accurate” answers about the company’s treatment of staff when he appeared before them. Since taking over the position in 2021, Thompson has been under constant pressure to resolve strikes. He also received criticism from MPs for not providing “fully accurate” answers when he appeared in front of them.
Royal Mail’s efforts to modernize the business failed amid industrial action, and questions about how it could compete with rival businesses in the parcel delivery market while also being burdened by its “universal services obligation” of delivering letters to all UK addresses six days a weeks. The government rejected a request last year to reduce this to five days per week.
Ofcom, the regulator of communications, announced on Monday it has opened an investigation into Royal Mail failing to meet delivery targets in 2022-23.
Thompson will remain on until the end October to assist with the transition. Thompson’s decision to leave was made after Royal Mail reached a deal with the Communication Workers Union last month. This could resolve a long-running dispute about jobs and conditions. Union members still have to vote on this deal.
Keith Williams, IDS Chairman, stated: “There’s now a clear road towards a competitive and profitable Royal Mail.” If ratified by the CWU, this agreement will provide greater job security, as well as increased rewards for our employees, both in terms of pay and profit sharing. The key to a successful agreement is the delivery.
The quality of service has been affected significantly by the industrial action and the high level of absence. Sorry that we did not deliver the high standard of service that our customers expected. “Improving service quality is our number one priority.”
We have reason to be optimistic as we move into 2023-24. Royal Mail must rebuild its business after the industrial action that caused damage to the Royal Mail.