The owner of Royal Mail yesterday insisted the postal service is back up and running despite missing delivery targets and losing almost £1m a day over the past year.
The results came days before a crucial deadline when the 508-year-old company could fall into foreign hands for the first time.
Parent company International Distributions Services (IDS) said the business had “stabilised” as it revealed Royal Mail posted losses of £348m in the year to the end of March.
But he urged regulators to speed up reforms so they could cut costs by £300m a year.
It came as watchdog Ofcom launched a new investigation into Royal Mail after it failed to meet delivery targets. The operator has already been fined £5.6m for its woeful performance the previous year.
Uncertain future: Royal Mail may fall into foreign hands
IDS’s annual results were published a day later than expected, after auditor KPMG asked for more time to approve the accounts. It came after the board said last week it was “willing to recommend” a £3.5bn takeover bid by Czech billionaire Daniel Kretinsky.
Kretinsky, known as the ‘Czech Sphinx’, has until 5pm on Wednesday to make a formal offer or walk away. A Royal Mail takeover would likely receive intense scrutiny from Westminster and regulators.
However, Martin Seidenberg, director of parent company IDS, said: ‘Over the last six months we have put Royal Mail on the right trajectory. We made good progress in meeting our modernization agenda and returned to growth in the second half.
‘We have improved quality, won back customers lost during the strikes, controlled costs and delivered Christmas to our customers.
“Positive momentum is building, although we have to work hard to return to profitability.” He reiterated calls for regulators to reform the service, saying they “have to get on with it” to allow Royal Mail to make a profit.
Bosses have been pushing for a change to the universal service obligation, meaning Royal Mail must deliver letters six days a week for a fixed price.
Ofcom said yesterday that Royal Mail delivered just 74.5 per cent of first class mail on a working day, compared to a target of 93 per cent.
It delivered 92.4 percent of second-class mail in three business days, missing the 98.5 percent threshold.
Royal Mail, which was privatized in 2013, has said it cannot meet the target, which it estimates will cost the company up to £675m a year.
It has asked ministers and Ofcom to allow it to scrap second-class letter deliveries on Saturdays and cut the service to alternate weekdays in a bid to save money.
The IDS stated yesterday that voluntary dismissals would be less than 1,000.
As a group, IDS posted a loss of £28m compared to £71m a year earlier, and its European GLS parcel business made a profit of £320m.