Royal Mail parent reports higher UK earnings as parcel volumes grow

International Distribution Services reported that its UK postal unit, Royal Mail, recorded underlying earnings of £5 million in the year to March 31, up from £2 million a year earlier. Revenues at the unit increased 2.6 percent to £8.4 billion despite higher national insurance contributions.

The group said parcel volumes rose 7 percent to 1.4 billion items over the period, while addressed letter volumes fell 10 percent to 5.7 billion. It attributed the letter decline to the absence of the 2024 general election boost that had supported volumes the previous year.

Group performance and international units Earnings across the wider IDS group declined 20 percent to £222 million. The GLS parcel division posted a 17.1 percent drop in earnings to £237 million after regulatory changes in Italy and weaker trading conditions in Canada.

Service changes and regulatory scrutiny Royal Mail is extending nationwide changes under a union agreement that will deliver second-class post every other weekday and end Saturday service across the UK. The company operates about 1,200 delivery offices.

Regulator Ofcom opened an investigation earlier this month into the company's failure to meet delivery targets. Royal Mail achieved 75.7 percent of first-class mail the next working day and 90.2 percent of second-class mail within three working days for the year to March 31.

It was fined a record £21 million by Ofcom in October last year for missing targets in 2024-25. The company said it is expanding its network of parcel lockers as out-of-home parcel volumes rose 40 percent over the year.