Royal Mail investigated for missing delivery targets in sixth year running

Martin Seidenberg, chief executive of parent company IDS, said: “In the last six months we have set Royal Mail on the right trajectory. We made good progress delivering our modernisation agenda and returned to growth in the second half.

“We have improved quality, won back customers lost during industrial action, controlled costs and delivered Christmas for our customers. Positive momentum is building, although there is hard work in front of us to get back to profitability.”

Bosses said that Royal Mail enjoyed strong growth in letter revenues in the second half of the year as two increases in stamp prices offset the decline in volumes, while parcel revenues also picked up.

The postal service has also benefited from cost-cutting efforts and measures to improve efficiency by cracking down on perennial issues such as staff sick absences.

Losses were largely offset by a £320m profit at GLS, the European parcels business of IDS. IDS proposed a final dividend of 2p for the year, which it said was funded by GLS.

The figures will stoke speculation that Mr Křetínský could look to split Royal Mail’s struggling letters business from its profitable parcels division. 

The tycoon, known as the “Czech Sphinx” for his inscrutable business manner, is expected to make a formal £3.5bn offer for IDS next week. 

The board has said it has minded to accept his proposal, subject to undertakings on public interest matters.

Mr Křetínský’s company EP Group, which is already the largest shareholder in IDS, now has until 5pm on Wednesday to either make a firm bid or walk away.

Analysts have suggested that the tycoon could look to merge GLS with PostNL, the Dutch postal operator in which he also holds a major stake, though sources close to the Czech sphinx insist he will not break up the company.

Overall, IDS posted a pre-tax loss of £75m for the year, narrower than the £110m loss posted the previous year. Revenues rose by £635m to £12.7bn.

Royal Mail’s finances have been a key point of contention in the takeover discussions as the company grapples with a slump in letter volumes.