Royal Mail 2025 profit marks turnaround after Kretinsky takeover
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Royal Mail reported its first profit in three years, boosted by higher parcel volumes and a £3.6bn takeover by Czech billionaire Daniel Kretinsky.
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A man walks past a logo of Royal Mail at the Mount Pleasant sorting office in London, Tuesday, August 26, 2025. (AP)
Royal Mail posted a pre-tax profit of £194m in the year to March, compared with a loss of £143m last year. The improvement, attributed to growing parcel volumes, marks the company’s first profit since 2022.
Martin Seidenberg, chief executive of IDS, said the results reflected hard work and investment. “Royal Mail returned to profit for the first time in three years, marking an important milestone in the company’s turnaround,” he said.
The results come after IDS completed its £3.6bn takeover by EP Group, controlled by Daniel Kretinsky, in April. The deal followed a UK government review under national security laws.
Kretinsky, who also holds stakes in Sainsbury’s and West Ham United, has expanded his European portfolio through energy and retail investments. IDS said the acquisition and universal service reform marked “the time to drive the business forward.”
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Ofcom postal targets and UK service reform
Despite the return to profitability, Royal Mail acknowledged ongoing service challenges. In April, Ofcom approved reforms that:
- Lowered first-class mail delivery targets from 93% to 90%.
- Reduced second-class targets from 98.5% to 95%.
- Allowed the company to cut Saturday deliveries of second-class letters and switch to alternate weekday services.
- Royal Mail admitted missing its first-class delivery target last year, achieving only 75.9% within one working day.
IDS transformation and parcel growth
IDS has been expanding parcel infrastructure, increasing out-of-home collection points by nearly 70% to around 24,000 locations. The group said it is investing in lockers and other efficiency measures to adapt to changing customer needs.
Meanwhile, its international parcel subsidiary GLS reported an adjusted operating profit of £286m, down £34m from the prior year, due to a challenging economic environment in Germany and Italy and foreign exchange fluctuations.
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With reforms in place and the takeover complete, IDS aims to build momentum. “Now is the time for us to drive the business forward and capitalise on our momentum,” Seidenberg said.
The company expects continued investment in transformation and parcel growth to sustain Royal Mail’s profitability in the coming years.
