Yahoo Finance Scrap Saturday deliveries or our struggles will continue, Royal Mail chief warns after £1bn loss
Royal Mail has warned that its poor financial performance will continue unless ministers let the company abandon Saturday letter deliveries.
The former FTSE 100 company on Thursday posted an operating loss of just over £1bn and an annual pre-tax losses of £676m for a year dominated by industrial action.
Chairman Keith Williams, who is back running the company following the exit of Simon Thompson last week, said the company would now “redouble its efforts” to end the six-day-a-week letter deliveries under what is called the Universal Service Obligation or USO.
Royal Mail is campaigning to change its schedule from a six to five-day-a-week, arguing that the decline of letters means its current programme of deliveries is financially unviable.
The company has also previously published research concluding that customers no longer value a six-day-a-week letters service.
Mr Williams said: "Royal Mail profitability is not in line with the regulatory return. The regulatory return is 5-10pc on the USO.
"The line coming back [from Government] is that they have not rejected any notion of change. They just keep on saying: 'There are no current plans.'
"We need to improve our service quality, which is a big feature of today. We need to do our bit and the government needs to do its bit by changing the USO."
Ofcom earlier this week opened an investigation into Royal Mail after figures showed that it breached its commitment to on-time letter deliveries.
Mr Thompson announced he was stepping down last week after little more than two years in the job. He is the second chief executive to quit in two years after Rico Back resigned during the pandemic.
Mr Williams said that the company was in advanced stages of agreeing his replacement but refused to provide more timing information.
Royal Mail's performance was heavily disrupted by strikes last year. However, the company recently struck a deal with the 115,000-strong Communication Workers Union (CWU) following a year-long row over pay and changes to working conditions.
Mr Williams said: “There is now a clear path towards a more competitive and profitable Royal Mail, delivering improved services for our customers whilst further reducing our environmental impact.”
