Royal Mail Under Investigation for Missed Delivery Targets
Royal Mail is facing scrutiny from Ofcom, the UK's communications regulator, for failing to meet its delivery targets. According to data from Royal Mail's parent company, International Distribution Services (IDS), only 74.5% of first-class mail was delivered on time last year, falling short of the 93% target set by Ofcom.
This shortfall has prompted Ofcom to launch an investigation. The regulator has stated that if Royal Mail fails to provide a satisfactory explanation and is found to be in breach of its obligations, it could face a financial penalty. This follows a £5.6 million fine imposed on Royal Mail last year for similar failures.
Despite the missed targets, Royal Mail's financial performance has shown some improvement. IDS's financial results reveal that Royal Mail's losses have narrowed to £348 million from £419 million for the year ending 31 March. This improvement is attributed to efforts to improve quality, win back customers lost during industrial action, and control costs.
Meanwhile, Royal Mail is facing a potential takeover bid from Czech billionaire Daniel Kretinsky, who has offered approximately £3.5 billion for the company. Business Secretary Kemi Badenoch has emphasized the need to protect Royal Mail's universal service obligation in any sale. IDS has indicated that Kretinsky is willing to provide "contractual undertakings" to safeguard key public interest factors, including maintaining six-day-a-week first-class letter deliveries, protecting workers' rights, preserving the Royal Mail brand, and keeping the company's UK headquarters and tax residence.