Royal Mail increases earnings despite staff cost pressures
Royal Mail owner International Distribution Services said its UK postal arm grew revenues and earnings despite soaring staff costs after the Government’s job tax hike.
IDS – bought last year by Czech billionaire Daniel Kretinsky – said Royal Mail saw underlying earnings jump to £5 million in the year to March 31, up from £2 million a year earlier, as revenues lifted 2.6 per cent to £8.4 billion, in spite of rising national insurance contributions. The previous year had also benefited from the 2024 general election boost to letter mailings.
But earnings in the wider IDS group slumped by a fifth to £222 million as the firm’s GLS parcel arm was hit by regulatory changes in Italy and a challenging trading environment in Canada.
GLS earnings fell 17.1 per cent to £237 million over the year. The group said parcel volumes rose 7 per cent to 1.4 billion over the year, but addressed letters fell 10 per cent to 5.7 billion. It said the decline reinforced the need to overhaul the universal service.
Royal Mail is pressing ahead with the roll-out of changes nationwide that will see second class post delivered every other weekday, with the Saturday service being scrapped across the UK.
It comes after an agreement with trade unions, which had been holding up the extension of the changes across its full network of around 1,200 delivery offices.
Royal Mail is under increasing pressure to improve service levels, with regulator Ofcom launching an investigation earlier this month into the firm’s failure to meet its delivery targets over the past year.