Royal Mail Returns To Profit After ‘Year Of Change’

Royal Mail has reported its first underlying profit in three years, with the company citing operational reforms and investment momentum following its £3.6 billion acquisition by Daniel Kretinsky’s EP Group.

Parent company International Distribution Services (IDS) posted underlying earnings of £12 million for the year to 31 March, excluding voluntary redundancy costs. This compares with losses of £336 million for the previous year. Including redundancy charges, Royal Mail recorded an underlying operating loss of £8 million. Across the wider IDS group, which includes the GLS parcel delivery business, underlying earnings reached £278 million, reversing a £28 million loss in the prior year.

The results mark a milestone year for Royal Mail, which moved into foreign ownership for the first time in its 500-year history. The company also secured regulatory approval from Ofcom to reform its universal postal service, allowing the removal of Saturday second-class letter deliveries and a move to every-other-day service from 28 July. Preparatory work is under way, with rollout plans informed by pilot schemes.

Chief executive Martin Seidenberg said: “It has been a year of change for IDS. Royal Mail returned to profit for the first time in three years, marking an important milestone in the company’s turnaround. With IDS’s acquisition by EP Group complete, and universal service reform decided, now is the time for us to drive the business forward and capitalise on our momentum.”

IDS confirmed further investment in its parcel and locker network to reflect changes in consumer behaviour and delivery demand. Royal Mail expanded its out-of-home collection and drop-off locations by 70 per cent over the past year to around 24,000, and has introduced its own branded lockers. GLS, which operates internationally, has also more than doubled its parcel locker footprint to over 20,000 and now offers more than 110,000 out-of-home access points.

For project managers, the shift represents a large-scale transformation programme encompassing regulatory change, network redesign, and international growth. Key delivery priorities include scaling locker infrastructure, optimising route networks, and embedding operational efficiencies that underpin IDS’s strategy to stabilise performance and compete in a rapidly evolving logistics market.