𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

The owner of Royal Mail has said it will take “many months” to roll out changes that will see it ditch second class letter deliveries on Saturdays across the UK.

International Distribution Services (IDS) – which saw its £3.6 billion takeover by Czech billionaire Daniel Kretinsky’s EP Group complete in June – said it was yet to start expanding the reforms outside of the pilot already running across 35 delivery offices.

Ofcom gave the green light to Royal Mail to scrap second class letter deliveries on Saturdays and change the service to every other weekday, starting from July 28.

But under its Universal Service Obligation, Royal Mail must keep Monday to Saturday deliveries for first-class post and maintain the target for second-class letters to arrive within three working days.

Royal Mail said it had started “detailed work” ahead of rolling out the changes nationwide, with the firm “using the learnings from pilots”.

But IDS chief executive Martin Seidenberg said it was a “massive task ahead of us” that will be continuing well into 2026.

He said: “We will take the time to get this right.

“We owe it to our customers that we are not flipping back and forth.”

He added the group had “always said it would take many months”.

IDS said it was too early to say when the changes will be completed and which of its 1,200 delivery offices would be next in line for the overhaul.

“This is a massive change for us as a company and the people of the country,” he said, given the group’s 130,000 workforce and delivery network.

The comments came as Royal Mail revealed it returned to an underlying operating profit for the first time in three years despite a “competitive and challenging” backdrop.

In its first set of figures since being taken over by EP Group, IDS said Royal Mail delivered underlying earnings, excluding voluntary redundancy costs, of £12 million for the year to March 31 compared with losses of £336 million the previous year.

But, with redundancy costs included, Royal Mail still remained in the red with underlying operating losses of £8 million, it said.

IDS said the underlying improvement at Royal Mail came “despite an increasingly competitive and challenging trading environment”.

The wider group, which also owns the GLS parcel business, reported underlying earnings of £278 million, against losses of £28 million in the previous year.

Pre-tax profits stood at £429 million, up from £114 million in the 53 weeks to March 2024.

Parcel volumes at Royal Mail post boxes also rose 6% over the year, although the ongoing decline in mail saw addressed letters drop 4%.

The figures come after a milestone year for the group, which saw Royal Mail taken into foreign ownership for the first time in its more than 500-year history.

Mr Seidenberg said: “It has been a year of change for IDS.”

He added: “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.”

It added it would continue to invest heavily in postal lockers following the EP Group takeover, with Royal Mail having boosted its out of home locations by almost 70% to about 24,000 by the end of August and launched its own branded lockers.

GLS continued to expand its network to more than 110,000 out-of-home access points and more than doubled the size of the GLS locker network to more than 20,000 by the end of August, the company said.

“Under the ownership of EP Group, we will continue to invest in the rapid expansion of our out-of-home network across both businesses to meet the changing needs of our customers around the globe,” Mr Seidenberg said.

IDS formally left the London Stock Exchange on June 2 after being taken over by EP Group following clearance by the Government at the end of 2024 and approval by shareholders in April.

Royal Mail’s new owner also issued a £1 so-called golden share to the UK Government, as agreed under the deal.

Mr Kretinsky, appointed as the new chairman of Royal Mail, has pledged to stick to the Universal Service Obligation after the takeover.