Royal Mail owner set to return to profit in first figures since £3.6bn takeover
The owner of Royal Mail is expected to show a return to annual earnings on Monday in the firm’s first set of results since the completion of its £3.6bn takeover by Czech billionaire Daniel Kretinsky.
International Distribution Services (IDS) will post figures for the 12 months to 31 March after a milestone year for the group, which saw Royal Mail taken into foreign ownership for the first time in its more than 500-year history.
The year has also seen regulator Ofcom rubber stamp reforms allowing Royal Mail to ditch second class letter deliveries on Saturdays and change the service to every other weekday, which the group can start rolling out from 28 July.
IDS said in January that it was on course to return to annual adjusted operating profit, before voluntary redundancy costs, in 2024-25, “despite the difficult market environment”.
Its third quarter update showed group revenues lifted 0.8 peer cent to £3.6bn thanks in part to a parcel boost over Christmas.
Royal Mail parcel revenues rose 2.5 per cent to £1.02bn in the quarter as prices rose, while the division was also helped by a better performance internationally, where revenues jumped 6.6 per cent to £227m.
But the group warned in November that it was facing a £120m hit from the incoming national insurance tax hike and that it could not rule out job cuts or price hikes to offset the blow.
It also saw an investigation launched in May after it only delivered just over three-quarters of first-class post on time last year, following hefty fines for missing targets in previous years.
Parent group IDS formally left the London Stock Exchange on 2 June after being taken over by Kretinsky’s EP Group following clearance by the government at the end of 2024 and approval by shareholders in April.
Royal Mail’s new owner also issued a £1 so-called golden share to the UK Government, as agreed under the deal.
Kretinsky – appointed as the new chairman of Royal Mail – has pledged to stick to the Universal Service Obligation (USO) after the takeover.
Royal Mail also announced in recent days that it will be the first international postal operator to launch new services so people can continue sending goods to the United States as new customs requirements take effect from 29 August.
Royal Mail customers now can use the company’s new postal delivery duties paid (PDDP) services, which follows a US executive order last month that goods valued at $800 or less will no longer be exempt from import duties and taxes from 29 August.
The Institute of Directors (IoD) has warned around 30 per cent of its member firms that export to the US will be hit by the new rules, with smaller companies predominantly impacted.
By Holly Williams, PA Business Editor