IDS pushed into the red after Royal Mail loses £1bn

The scale of the Royal Mail loss - against a profit of £250m a year earlier - led IDS to a group loss of £748m for the year to March 26, compared with a profit of £577m last time.

Group adjusted operating losses were £71m compared with a profit of £758m. Analysts on average had expected a loss of £114m, according to a company-compiled consensus.

IDS cited industrial action by the Communication Workers Union, lower Covid test kit volumes and a weaker online retail market for the loss.

Revenue across the group fell 5% to £12.04bn and group pre-tax losses were £676m, having posted a profit of £662 million last year. IDS said it was targeting an adjusted operating profit in this financial year.

More than 115,000 postal workers at Royal Mail held a total of 18 days of strikes between September and December last year, demanding higher pay and better working conditions.

An agreement with the CWU is awaiting approval by the unions members. The dispute last week claimed the scalp of chief executive Simon Thompson, who had been accused of taking too confrontational a position.

He also faced criticism from MPs who accused him of not giving “wholly accurate” answers about the company’s treatment of staff when he appeared before them.

The company also confirmed that the Royal Mail loss and plans to invest in its profitable GLS parcels division, meant it would not pay a final dividend. To compound the company's woes industry regulator Ofcom on Monday said that it had opened an investigation into Royal Mail’s failure to meet its delivery targets for 2022-23.

Reporting by Frank Prenesti for Sharecast.com