Royal Mail crisis deepens: Losses to hit £745m as months of business motion take their toll
Royal Mail faces losses of nearly £750million because the crisis engulfing the corporate deepens.
With bosses as a result of be grilled by MPs today over the worsening state of the service, analysts said the business was on the right track to rack up a £745million loss for the 12 months to the top of March.
That represents greater than £2million a day and follows a £416million profit last 12 months.
Analysts consider that Royal Mail was on the right track to rack up a £745m loss for the 12 months to the top of March
Royal Mail has been battered by strikes, the top of the pandemic parcel boom and a recent Russian cyber-attack that has stopped it sending post overseas.
So large are Royal Mail’s projected losses that it might push its parent company, International Distributions Services (IDS), to a £290million loss for the 12 months from a £662million profit in 2022.
The attention-watering sum also stands in stark contrast to IDS’s international delivery business GLS, which is predicted to rake in a profit this 12 months of £317million.
Royal Mail, which was arrange 507 years ago by Henry VIII, is facing a threat to its existence because it tries to spice up its competitiveness with a series of changes to working conditions and the automation of sorting offices across the country.
The plans have been opposed by the Communication Staff Union (CWU), which represents around 115,000 postal staff.
In a bitter industrial dispute, staff walked out over the crucial Christmas period, leaving cards and presents piled up in post rooms across Britain.
Matters were made worse last week when Royal Mail warned a cyber-attack has caused ‘serious disruption’ to its overseas postal service, leaving it unable to send parcels and letters abroad.
The attack has mainly affected the firm’s massive Worldwide Distribution Centre near Heathrow airport.
A Russia-linked hacking firm called Lockbit claimed responsibility. Greater than 100 Royal Mail engineers are working to search out an answer and get the service back up and running. But the corporate has not yet provided a date for when overseas post will resume.
The incident adds one other headache for IDS boss Simon Thompson, who’s as a result of appear before the Commons Business, Energy and Industrial Strategy committee today to reply questions on the state of the firm.
Appearing alongside him might be Nick Read, the boss of the Post Office, a separate state-owned company, in addition to CWU heads Dave Ward and Andy Furey.
The seemingly limitless stream of problems at Royal Mail has dented IDS shares, which have tumbled 55 per cent during the last 12 months and are languishing well below the 2013 330p float price.
Thompson warned in a letter to staff last month that they were ‘fighting for the lifetime of this business’.
IDS has previously said it could split the corporate in two to separate troublesome Royal Mail from the rather more successful GLS branch.
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