Royal Mail said it could split itself up as it unveiled losses of £1mn a day and a name change of its holding company to International Distribution Services.
The postal provider on Wednesday warned that the board would consider the separation of its two brands — GLS and Royal Mail — if “significant operational change” in its UK operations was not achieved.
The threat came as Royal Mail said it was losing £1mn a day, as thousands of postal workers announced a strike over pay and working conditions.
The UK postal service said revenue in the three months to June fell 11.5 per cent year on year, leading to an adjusted operating loss of £92mn. Revenue at Amsterdam-based parcel sorting subsidiary GLS rose 7.8 per cent, generating an operating profit of £94mn.
“While GLS delivered a solid performance in the first quarter, the performance of Royal Mail was disappointing,” said chair Keith Williams.
The adjusted operating loss resulted from “a decline in parcel volumes post the pandemic and a lack of progress in delivering efficiencies”, he added.
“The pandemic boom in parcel volumes bolstered by the delivery of test kits and parcels is over,” he said. “Royal Mail is currently losing £1mn per day and the efficiency improvements which are needed for long-term success have stalled.”
Royal Mail staff voted in favor of industrial action on Tuesday following a dispute over pay and working conditions. If it proceeds it will be the biggest strike faced by the company since 2009.