International Distributions Services PLC on Thursday reported a widened interim loss as revenue at UK letter deliverer Royal Mail declined and costs increased.
The company once again used the results to call for ‘urgent’ reform of its universal service mandate in the UK.
IDS said pretax profit in the half-year that ended on September 24 widened by 53% to £194 million from £127 million a year ago.
Revenue climbed 0.4% to £5.86 billion from £5.84 billion, trailing operating costs, which increased 2.3% to £6.10 billion from £5.97 billion.
Notably within that total, Royal Mail revenue fell 2.9% to £3.54 billion from £3.65 billion. By contrast, international package delivery arm GLS delivered a 5.9% revenue increase to £2.33 billion from £2.20 billion.
IDS Chief Executive Martin Seidenberg said the company delivered on its plan to stabilise Royal Mail via cost control ‘and ruthlessly prioritising high-return projects’.
The company said it can not fund dividends until it returns to positive cash generation.
Looking ahead, IDS said it expects adjusted operating performance in financial 2024, which ends in late March, to be breakeven, excluding voluntary redundancy costs. For financial 2023, the company had reported an adjusted operating loss of £71 million, swung from a profit of £758 million a year prior.
‘Looking ahead, we are transforming our business every day, but we can’t do it all on our own,’ Seidenberg said. ‘We also need the regulator and the government to do their bit. It’s simply not sustainable to maintain a network built for 20 billion letters, when we’re now only delivering seven billion. The UK is not immune to the trends that we see across the world. Many other comparable countries have already reformed their Universal Service, and the UK is getting left behind.’
IDS shares were down 2.8% to 237.83 pence each on Thursday morning in London.
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