Royal Mail is under investigation by Ofcom after failing to meet delivery targets, with less than three-quarters of first class mail delivered on time last year.
According to Royal Mail's parent company, International Distribution Services (IDS), only 74.5% of first class mail meets one business day delivery requirements.
Ofcom regulations stipulate that 93% of first class mail must be delivered within the specified time frame, excluding the Christmas period. “If you do not provide a satisfactory explanation and we determine that Royal Mail has failed to comply with its obligations, we will consider imposing a financial penalty,” the regulator said. It comes after Royal Mail was fined £5.6m last year over similar failings in 2022-23.
Royal Mail's latest figures, showing lagging performance, were released late on Friday after the market closed. IDS's financial results reveal that Royal Mail's losses narrowed to £348m from £419m for the year ending March 31. Martin Seidenberg, CEO of IDS, commented: “We improved quality, regained customers lost during industry events, controlled costs, and delivered Christmas for our customers.”
The results come as IDS anticipates a potential takeover bid from Czech billionaire Daniil Kretinsky, who made a bid worth almost £3.5bn on May 15. Business Minister Kemi Badenoch stressed the need to protect Royal Mail's comprehensive service commitment in any sale. IDS noted that Kretinsky was prepared to make “contractual undertakings” to protect key public interest factors, recognizing Royal Mail’s role as a crucial part of the national infrastructure.
The proposed commitments include maintaining six-day-a-week delivery of first-class letters under the universal service, protecting workers' rights, maintaining the Royal Mail brand, and maintaining the company's UK headquarters and tax residence.