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Royal Mail increases earnings despite staff cost pressures
Parcel volumes rose 7% to 1.4 billion, but addressed letters fell 10% as Royal Mail pushes ahead with universal service changes.
- Royal Mail's annual operating profits plunged to £96 million from £198 million, driven by soaring labour costs including a £133 million national insurance bill. The firm is rolling out nationwide service changes, delivering second-class post every other weekday and scrapping Saturday deliveries across around 1,200 offices.
- These reforms follow an agreement with the Communication Workers Union, addressing shifting mail volumes that saw parcel traffic rise 7% to 1.4 billion while addressed letters fell 10% to 5.7 billion. Management stated the changes aim to create a more efficient, reliable and sustainable service.
- Regulator Ofcom, which issued a record £21 million fine last October, launched another investigation this month into persistent service failures. Royal Mail delivered just 75.7% of first-class mail on time and 90.2% of second-class mail within three working days, well below regulatory targets.
- Parent company International Distribution Services reported group earnings slumped 20% to £222 million, hit by regulatory challenges in Italy and Canada. Despite this downturn, chief executive Martin Seidenberg received £6.9 million in total pay, more than tripling his £2.1 million from the previous year.
- Triggered by the £3.6 billion takeover by Czech billionaire Daniel Kretinsky's EP Group, Seidenberg's pay increase resulted from accelerated vesting of long-term incentive share awards. The company noted this explains the significant rise in the highest-paid director's emoluments following the acquisition.
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Royal Mail profits more than halve amid Labour's tax raids and declining letter volumes
Royal Mail's profits almost halved in the year to March after rising employment costs, declining letter volumes and a £133million increase in costs linked to changes in national insurance contributions weighed on earnings.
·London, United Kingdom
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Coverage Details
Total News Sources10
Leaning Left3Leaning Right1Center2Last UpdatedBias Distribution50% Left
Bias Distribution
- 50% of the sources lean Left
50% Left
L 50%
C 33%
R 17%
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