Royal Mail returns profit following takeover

Royal Mail, the UK’s primary postal service, has returned a profit for the first time in three years according to its recent financial report, which is the first report since the company was taken over in April by Czech billionaire, Daniel Kretinsky.

The amount, which excludes redundancy costs, is reported to be £12m in profit compared to the previous £336m loss. However, with Royal Mail’s redundancy costs taken into account, the company still made a loss of £8m in the year to March.

The profit is seen as a “turnaround” by the chief executive officer of Royal Mail’s parent group, International Distribution Services (IDS), with the group satisfied by Royal Mail’s increased sales of 7% at £8.2bn.

Over the past few months, the Royal Mail has announced a number of changes to the Universal Posting Service (UPS) including the altering of Second Class letters which will be delivered over three alternative weekdays instead of six.

The quality targets which form the organisations Universal Service Obligation (USO) will be enforced by Ofcom as of April 1^st, 2026.

Several news outlets have highlighted the difficult few years Royal Mail has faced due to the declining use of letters being sent, as well as strikes and target-based fines. Over the past year, parcel volumes have increased 6% while letters have declined by 4%.

Speaking at the time of the announcements, Mark Statton, head of public sector strategy at mail solutions provider, Quadient, said: “The recent USO reform and reduction in Second Class postal deliveries underscores a significant shift in the traditional mail model.

“Organisations that rely exclusively on physical mail must explore blended communications to avoid delays in customer engagement, missed SLAs, and potential regulatory risks. At Quadient, we’re seeing more SMEs and local authorities adopt blended communication strategies to ensure messages reliably reach their intended recipients.”

Royal Mail was bought in April by Kretinsky’s EP Group, with the focus being on modernising the service and making parcel deliveries more profitable. Kretinsky’s ownership of Royal Mail is the first time the organisation has been taken into foreign ownership since it was founded by Henry VIII over 500 years ago.