Royal Mail has reported a staggering loss of over one billion pounds, following a year marked by industrial action, poor delivery performance, and the impact of the Covid-19 pandemic. Parent company International Distributions Services (IDS) revealed that Royal Mail's profits plummeted to £1.044bn in the year ending March 2022 - a significant drop from the previous year's profit of £250m.
A combination of factors contributed to Royal Mail's dismal earnings this financial year. The widespread industrial action taken by postal workers affected operations across the country. Moreover, online shopping numbers decreased during this period while demand for Covid-19 test kits also saw a decline.
The company’s international parcel and letter deliveries through Post Office branches suffered as well. On an adjusted basis, Royal Mail reported an operating loss of £419m; however, this figure surpassed market expectations.
Last week, CEO Simon Thompson announced his resignation amidst ongoing tensions with trade unions but will remain at his post until October end.
In addition to these challenges faced by Royal Mail throughout the past year, it had cut 10,000 jobs in efforts to improve productivity levels within its workforce – ultimately proving unsuccessful given their poor performance results.
According to IDS reports for 26th March 2022 compared with those from last fiscal year-end (£748m net loss vs £577m net profit), various cost-cutting measures were implemented during H2 FY22 which helped "rightsize" business operations albeit resulting in compromised quality standards for services provided by them including mail delivery among other aspects such as customer satisfaction ratings etcetera.
The Communications Workers Union members are set to vote on an agreement reached between both parties later this month – paving way towards potential operational efficiency improvements aimed at making Royal Mail more competitive within industry circles once again if approved unanimously therein without any further delays or disruptions caused thereby going forward into FY23 and beyond.
As the IDS chairman optimistically noted, there is now a "clear path towards a more competitive and profitable Royal Mail, delivering improved services for our customers while further reducing our environmental impact." The company's management and stakeholders hope that these changes will set the stage for future growth in both profitability and service excellence.