Royal Mail crisis deepens: Losses to hit £745m as strikes take toll
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Royal Mail crisis deepens: Losses reach £745m as months of union action take their toll
Royal Mail faces a loss of nearly £750 million as the crisis engulfing the company worsens.
With bosses due to be called to court today by MPs over the deteriorating record, analysts said the company was on track to post a loss of £745m for the 12 months to the end of March.
That represents more than £2 million a day and follows profits of £416 million last year.
Analysts believe Royal Mail was on track to post a loss of £745m in the 12 months to the end of March
Royal Mail has been battered by strikes, the end of the pandemic parcel boom and a recent Russian cyber-attack that stopped mail being sent abroad.
Royal Mail’s projected losses are so large that its parent company, International Distributions Services (IDS), would make a loss of £290m for the year from a profit of £662m in 2022.
The eye-watering sum also contrasts sharply with IDS’ international delivery company GLS, which is expected to make a profit of £317 million this year.
Founded 507 years ago by Henry VIII, Royal Mail’s survival is under threat as it tries to bolster its competitiveness with a series of changes in working conditions and the automation of sorting offices across the country.
The plans were opposed by the Communication Workers Union (CWU), which represents about 115,000 postal workers.
In a bitter labor dispute, staff walked out during the crucial Christmas period, leaving cards and presents in mailrooms across Britain.
Things got worse last week when Royal Mail warned a cyber-attack had caused a ‘serious disruption’ to the overseas postal service, rendering it unable to send parcels and letters abroad.
The attack particularly affected the company’s massive global distribution center near Heathrow Airport.
A Russia-affiliated hacking company called Lockbit has claimed responsibility. More than 100 Royal Mail technicians are working on a solution and getting the service back up and running. But the company has not yet given a date when mail abroad will resume.
The incident gives another headache to IDS boss Simon Thompson, who is due to appear before the Commons Business, Energy and Industrial Strategy committee today to answer questions about the company’s condition.
Next to him appear Nick Read, the boss of the post office, a separate state company, as well as CWU heads Dave Ward and Andy Furey.
The seemingly endless stream of problems at Royal Mail has put a dent in IDS shareswhich are down 55 percent over the past 12 months and languish well below the 330p float price of 2013.
Thompson warned employees in a letter last month that they were “fighting for the survival of this company.”
IDS has previously said it could split the company in two to separate troublesome Royal Mail from the much more successful GLS arm.