Royal Mail returns to profit for the first time in three years

International Distribution Services has announced its full year results for the year ended 30 March 2025. Group revenue was £13.1 billion, up 4.8% on last year, with an adjusted operating profit of £278 million, up £306 million year-on-year. Royal Mail significantly improved its financial and operational performance, returning to an adjusted operating profit (excluding voluntary redundancy costs) of £12 million for the first time in three years, following significant losses in 2022-23 and 2023-24. This is in line with guidance and was achieved despite an increasingly competitive and challenging trading environment.Meanwhile, GLS delivered a resilient performance and solid revenue growth, investing in its out of home network and expanding its international business to support cross-border volumes. It made an adjusted operating profit of £286 million, down £34 million on 2023-24 due to a challenging macroeconomic and regulatory environment in Germany and Italy and foreign exchange movements.The Group made good progress over the year, with continued transformation – including rapid expansion of out of home options across both Royal Mail and GLS – to provide greater convenience for customers in all markets. Royal Mail increased out of home locations by almost 70% to c.24,000 as at the end of August 2025 and launched its own branded lockers. GLS continued to expand its network to over 110,000 out of home access points, and more than doubled the size of the GLS locker network to over 20,000 by the end of August.3The Group returned to positive in-year trading cashflow and on 12 June 2025 Standard & Poor confirmed IDS’ investment grade credit rating (BBB- stable outlook).Martin Seidenberg, Group Chief Executive Officer, said: “It has been a year of change for IDS. Thanks to the hard work of our people and our investment in transformation, 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.“GLS has further increased automation and capacity at strategic parcel hubs in France and Germany, alongside expanding the European out of home network with over 110,000 pick-up and drop-off points now available to customers. 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.”Key points:Royal Mail turnaround and return to profit:Expansion of multi-channel and out of home options for customers to improve convenienceDelivered almost 70% increase in out of home locations to almost 24,000 as at 29 August 2025, including over 2,000 lockers and 7,500 Collect+ stores, 11,500 Post Office branches, 1,200 Customer Service Points and 1,400 parcel postboxes.Launched Royal Mail branded parcel locker network and new partnerships, including with Sainsbury’s and Co-op.Announced the roll out of 3,500 parcel-friendly ‘postboxes of the future’ in August 2025. These feature a digitally-activated drop-down drawer so customers can send parcels as large as a shoebox. Customers can also now request digital ‘proof of posting’ at all 115,000 postboxes the length and breadth of the UK.Modernisation continued at pace with a focus on increasing efficiency and reducing costsParcel automation increased to 90%, up from 50% in 2022, with parcel hubs at Daventry and Warrington now able to process up to 1.5 million parcels a day.Deployed the biggest operational change for over 20 years, changing frontline start times to enable the removal of half of domestic flights, improve reliability, increase network capacity and reduce emissions.Enabled real time visibility of parcels, vehicles and almost one million york containers through digital tagging, increasing efficiency and reducing fuel consumption through optimised vehicle use.Strengthened its position as the UK’s greenest delivery company. Royal Mail operates the largest electric delivery fleet in the UK, with over 7,000 electric vehicles. Emissions reduced by 25% across all scopes compared to the baseline year and average emissions per parcel delivered fell to 165g CO2e, versus 206g CO2e in 2023-24.Following Ofcom’s decision in July 2025, we have started the detailed work ahead of implementation of Universal Service reform, using the learnings from pilots.As a result of the significant operational changes highlighted above, quality of service continued to improve. Providing customers with a high-quality service remains a top priority.Parcel volume grew, up 6% in 2024-25, while addressed letters (excluding election mail) declined by 4%.GLS market growth and expansion of cross-border services:Continued profitability across almost all markets, with particularly good performances in Spain and PolandContinued to expand out of home network with over 110,000 access points at the end of August 2025, up almost 40% from April 2024.More than doubled the GLS locker network to over 20,000 lockers, up from around 7,000 in the previous year.Opened two new hubs in Paris and Berlin, with a combined capacity to process up to 600,000 parcels per day.Greater focus on innovation and expansion of the international business networkExpansion of warehousing and fulfilment services to provide faster B2C and B2B customer orders in Hungary and Spain, adding to existing services in Germany and Slovenia.Further scaling and development of GLS’ market-leading real-time tracking technology, including more accurate last mile navigation, guiding drivers down to the final metre.Launched new cross-border services for North American and EU customers for transatlantic deliveries.Enhanced global distribution capabilities across Asia Pacific through partnership with SF Express, China’s largest logistics provider.Acquired 20% stake in ACS, Greece’s largest domestic parcel carrier.In 2024, GLS received approval for its science-based targets from the Science Based Targets initiative, marking a significant milestone in GLS’ environmental strategy. As part of its decarbonisation efforts, GLS is transforming its fleet to electric and low-emission vehicles and increasing its use of renewable electricity. These efforts contributed to a 7% reduction in greenhouse gas emissions in 2024 compared to 2023.Weiter zum vollständigen Artikel bei Post&Parcel Weiter zum vollständigen Artikel bei Post&Parcel