Royal Mail has reported its first profit in three years, posting £12 million in earnings for the period following its acquisition by Czech billionaire Daniel Kretinsky in April. This profit figure excludes costs related to voluntary redundancies. The company’s performance included a 6% increase in parcel volumes, while letter deliveries decreased by 4%. In July, Royal Mail had announced it would cease Saturday deliveries of second-class letters due to declining demand.
The company has faced challenges over recent years, including losses, reduced market share, and financial penalties for failing to meet delivery targets. As part of its efforts to modernize, Royal Mail is shifting its focus toward parcel deliveries, which are more profitable. Martin Seidenberg, CEO of International Distribution Services (IDS) which owns Royal Mail, indicated that the company views this return to profitability as a significant step in its recovery.
When accounting for redundancy costs, Royal Mail remains in the red, reporting a £336 million loss in the previous year. In a recent initiative, Royal Mail announced plans to install 3,500 solar-powered postboxes across the UK to facilitate small parcel deposits.
The acquisition by Kretinsky, who also has stakes in West Ham United and Sainsbury’s, marks the first instance of Royal Mail being held under foreign ownership. The EP Group, the new owner, has committed to maintaining the Universal Service Obligation (USO), which ensures letter delivery six days a week and parcel delivery from Monday to Friday. However, the USO is currently being reviewed, with suggestions to limit second-class deliveries to every other weekday, a change that could save the company up to £300 million annually.
Under the terms of the acquisition, EP Group has agreed to retain the Royal Mail brand, maintain its headquarters and tax residency in the UK for five years, and the government continues to hold a “golden share” requiring approval for substantial changes in ownership or operational structure.
Source: https://www.bbc.com/news/articles/cger3w129l0o?at_medium=RSS&at_campaign=rss