Royal Mail strikes push owner into red after costing £1m a day

Strike action cost Royal Mail more than £1m every day over the past 12 months, with the disruption contributing to an annual loss of more than £1bn for the group’s owner.

International Distributions Services (IDS) revealed Royal Mail swung to an operating loss of £1.04bn for the year to March 26, compared to earnings of £250m for the previous year.

On an underlying basis, Royal Mail recorded operating losses of £419m – more than £1.1m for every day of the year – versus profits of £416m the previous year.

IDS said the losses were largely down to the impact of industrial action. The company booked a £539m writedown on the value of Royal Mail due to the impact of strikes and the “current risk backdrop”, while it took a hit of around £200m from 18 days of strikes.

The group also revealed a cyber attack in January cost it £20m in lost revenues after it was left unable to send international parcels and consumers and businesses faced lengthy delays.

IDS overall posted a £748m annual operating loss, against profits of £577m the previous year, but IDS said it was targeting a return to underlying earnings over the 2023-24 financial year.

The figures come after Royal Mail last month agreed a deal with the Communication Workers Union (CWU).

But it faces further turbulence after chief executive Simon Thompson announced he will step down by the end of the year and news earlier this week that Royal Mail is being investigated for failing to meet its delivery targets in the past year.