'It's been a difficult year': Royal Mail owner blames strikes for annual loss of £1bn

Royal Mail has been blighted by a number of issues in the past year. Credit: PA

Royal Mail has blamed strike action for contributing to a full-year loss of more than £1 billion.

The group's owner, International Distributions Services (IDS), revealed Royal Mail swung to an operating loss of £1.04 billion for the year to March 26, against earnings of £250 million the previous year.

Royal Mail saw operating losses of £419 million, on an underlying basis, against profits of £416 million the previous year.

IDS said the losses were largely down to crippling industrial action after it booked a £539 million write-down on the value of Royal Mail, due to the impact of strikes and the "current risk backdrop".

Royal Mail apologises for April Fool's joke promising staff 11% pay rise
Strikes by Royal Mail workers are thought to have cost the company around £200 million. Credit: PA

Some 18 days worth of strikes took a hit out of Royal Mail of around £200 million.

The group also revealed a cyber attack in January cost it £20 million in lost revenues, leaving it unable to send international parcels while consumers and businesses faced lengthy delays.

IDS overall posted a £748 million annual operating loss, against profits of £577 million the previous year, but said it was targeting a return to underlying earnings over 2023-24.

The figures come after Royal Mail last month agreed a deal with the Communication Workers Union (CWU) over pay, conditions and jobs.

But it faces further turbulence with chief executive Simon Thompson recently announcing he will step down by the end of the year.

Want a quick and expert briefing on the biggest news stories? Listen to our latest podcasts to find out What You Need To Know...

Meanwhile, earlier this week, news broke that Royal Mail is being investigated for failing to meet its delivery targets in the past year.

IDS chairman Keith Williams said: "We apologise to everyone for not delivering a quality of service to the standards that we expect.

"It's been a difficult year for Royal Mail, in particular for customers and our people and shareholders."

He added: "We are absolutely committed that we do improve our quality of service and start to deliver to customers the service that they pay for."

IDS revealed on Monday that only 73.7% of first class mail was delivered within one working day across the year. The target was 93%.

Royal Mail plans to ditch islands' mail planes in favour of ferry

He said the group is not blaming the CWU for the failures but added that "clearly the strikes didn't help".

Walkouts accounted for around eight percentage points of the first class target miss, according to Mr Williams.

But he added there were "grounds for optimism", with management expecting Royal Mail to return to profit in 2024-25, following the deal with the CWU.

He insisted that Royal Mail "does have a future in the group".

The Partygate: The Inside Story podcast brings you fresh revelations and our whistleblowers in their own words in the definitive behind-closed-doors story of how ITV News uncovered one of the biggest scandals of our era