Royal Mail is expected to post losses of almost £1m a day as its takeover by a Czech billionaire hangs in the balance.
The postal service, owned by International Distributions Services (IDS), will reveal an annual loss of £313m next week, City analysts estimate. Although this is much less than the £1bn loss it recorded the previous year, it exposes the crisis still gripping Royal Mail.
IDS bosses said this week that the company was “willing” to accept a £3.5bn takeover offer from Daniel Kretinsky.
The Czech tycoon’s offer represents an increase of almost 16 percent over the previous rejected offer submitted by his PE Group last month. Kretinsky, known as the Czech Sphinx, already owns 27.5 per cent of IDS, is a co-owner of West Ham United and has a stake in Sainsbury’s.
But yesterday he was told he must pass national security tests and meet union demands to prevent his acquisition plans from being ruined.
Proposal: IDS bosses said this week the company was “determined” to accept a £3.5bn takeover offer from Daniel Kretinsky.
Chancellor Jeremy Hunt said the Government would examine the “risks” posed by the offer. This appears to suggest that Kretinsky’s offer will come under scrutiny by the Government under the National Security and Investment Act.
But it also faces increasing pressure to ensure vital services are protected, with Business Secretary Kemi Badenoch calling for strict guarantees that its six-day-a-week service will be maintained and campaigners demanding the sale be blocked. .
The head of the Communication Workers Union threatened a strike if his demands on working conditions and the universal service obligation are not met.
But it’s not all bad for IDS and there are expected to be some signs of improvement in Royal Mail’s results.
The company lost £319m in the first half of the year, suggesting it managed to make a small profit in the second half.
This compares to a particularly difficult 2022, when the group was hit by a strike. Overall, IDS is expected to post profits of £3m for the year ending the end of March as its Netherlands-based GLS parcel business strengthens its balance sheet.
Susannah Streeter, head of money and markets at investment platform Hargreaves Lansdown, said GLS was the “jewel in the company’s crown”.
“EP Corporate Group very likely sees many long-term opportunities here,” he added.
IDS group revenue is expected to reach £12.4 billion.
The company will publish its results on Thursday. Yesterday the shares fell 0.6 per cent, or 2p, to 320p.
