Royal Mail is being investigated by Ofcom for failing to meet delivery targets; last year, less than three-quarters of first-class mail was delivered on time.
According to Royal Mail's parent company, International Distribution Services (IDS), only 74.5% of first class mail met the one working day delivery requirement.
Ofcom regulations require 93% of first class mail to be delivered within the specified timeframe, excluding the Christmas period. The regulator said: “If no satisfactory explanation is provided and we determine that Royal Mail has failed to meet its obligations, we will consider whether to impose a financial penalty.” This follows a £5.6 million fine imposed on Royal Mail last year for similar failures in 2022-2023.
Royal Mail's latest figures, which show a slowing performance, were released late on Friday after the market close. IDS's financial results show Royal Mail's losses have been cut from £419m for the year ending March 31 to £348m. IDS CEO Martin Seidenberg commented: “We improved quality, regained customers lost during industrial action, controlled costs and delivered Christmas for our customers.”
These results come as IDS anticipates a possible buyout offer from Czech billionaire Daniel Kretinsky, who on May 15 proposed a bid worth around £3.5 billion. Business Secretary Kemi Badenoch has stressed the need to protect Royal Mail's universal service obligation with every sale. IDS has indicated that Kretinsky is willing to enter into “contractual commitments” to secure important public interest factors, recognizing Royal Mail's role as a crucial part of the national infrastructure.
The proposed commitments include maintaining first class letter delivery six days a week under the universal service, protecting workers' rights, retaining the Royal Mail brand and retaining the company's UK headquarters and tax residence.
