Royal Mail made a loss of £1 billion in the year to the end of March 2023 after the postal service was hit by a wave of strikes and slump in demand for parcel deliveries.
Royal Mail owner International Distribution Services said the loss was “due to industrial action, inability to deliver the in-year benefits of planned productivity improvements, lower test kit volumes and a weaker online retail market.”
The firm said it had completed a 10,000 reduction in its staff numbers by the end of March, and last month reached a deal with the Communication Workers Union that would see a 10% pay rise and profit share scheme for remaining staff.
IDS chair Keith Williams said: “I said before that we had reached a crossroads at Royal Mail. Now that we have a negotiators agreement with CWU that will shortly go out to ballot, and thanks to the good progress made on our five-point plan to stabilise Royal Mail, our destination is coming into sight.”
“If ratified, the CWU agreement provides greater job security and increased rewards - through both pay and profit share - for our employees. Successful delivery of the agreement will be key.”
The £1 billion loss by Royal Mail compares to a £250 million profit it made in the previous year. The bulk of the loss relates to a impairment charge of £539 million for the value of Royal Mail which it said was ‘given the current risk backdrop and ongoing industrial dispute.’
It follows an 18-day spate of strikes by postal workers, including during the crucial Christmas trading season, which the firm said caused shoppers to shop in-person rather than online and retailers favoruing other parcel carriers instead of Royal Mail.
Demand for ‘tracked returns’ parcels fell 21% year-on-year, while total parcel revenue was down 18.5% to £3.9 billion. Letter revenue fell 5.7% to £3.5 billion.