Royal Mail chiefs warned that its postal service was haemorrhaging £1m a day as revenues across the group slumped 5.1 per cent in the first quarter of the year.
Revenues at the flagship postal arm of the group plunged £92m to £1.88bn in the three months to June, which bosses said reflected a slowdown in retail trends, as well as the delivery of Covid test kits that buoyed the firm’s performance through the pandemic.
Revenues across the group, including its Dutch logistics division GLS, fell to £2.99bn, down 5.1 per cent on last year but 14.1 per cent ahead of pre-pandemic levels.
“The pandemic boom in parcel volumes bolstered by the delivery of test kits and parcels is over,” said Keith Williams, chair of Royal Mail.
“Royal Mail is currently losing one million pounds per day and the efficiency improvements which are needed for long term success have stalled.”
Bosses said the group had become increasingly reliant on GLS for returns – which saw a 7.5 per cent jump in revenues to £1.12bn – and they were now mulling a breakup of the two companies if the outlook fails to improve at Royal Mail.
The update comes as the Communication Worker Union (CWU) served its notice to Royal Mail this afternoon for its second national strike ballot over “unacceptable change proposals.”
The union is refusing to back this year’s efficiency targets, meaning that £100m of the planned £350m in cost savings is under pressure.
A Royal Mail spokesperson said the second ballot was “another sign that the CWU are against the change required to modernise our business so we can compete, grow and succeed in the future”.
The union has already threatened the postal firm with the biggest strike of the summer over pay, following a landslide ballot result on Tuesday, where nearly 90,000 workers voted 97.6 per cent in favour of industrial action.
Royal Mail offered a pay deal worth up to 5.5 per cent for CWU grade colleagues, which the CWU wholeheartedly rejected.