Royal Mail Revenue Rises 2.6% to £8.4 Billion as IDS Profit Falls 20%

Q: Why did the CEO's pay triple as profits fell and Royal Mail faced record fines for its poor delivery service?

Seidenberg’s pay tripled mainly because of a one-off takeover-related payout, not because IDS or Royal Mail performed strongly. IDS said his £6.9 million package was driven by long-term incentive awards and share-based bonuses that vested when the company was delisted from the London Stock Exchange after Daniel Kretinsky’s £3.6 billion takeover. In other words, the jump was largely triggered by a corporate event tied to the acquisition, rather than annual profit growth or service improvements. That is why the rise in pay sits awkwardly alongside weaker underlying results. IDS’s operating profit fell 20 percent to £222 million, with the group hit by a sharp drop in profits at GLS as well as higher labour and tax costs. Royal Mail itself only made a thin operating profit of about £5 million, even though parcel volumes and revenue rose, because rising employment costs and the structural decline in letters continued to squeeze margins. The controversy is sharper because Royal Mail’s service record remains poor. Ofcom fined it a record £21 million for missing delivery targets, and the company later confirmed it had missed them again. MPs and regulators have pointed to millions of delayed letters and questioned whether Royal Mail has moved fast enough on reform and investment. So the short answer is that the CEO’s pay rose because takeover-triggered incentives crystallised, while profits and service quality reflected the much tougher operational reality facing the business.

1 articles · Updated · City A.M. · Jun 23

£8.4 billion in Royal Mail revenue and £13.6 billion across IDS marked a stronger top line in the year to March, even as group operating profit dropped 20% to £222 million.
1.4 billion parcel deliveries—up 7%—helped offset a 10% fall in addressed letters, while growth came despite higher national insurance costs and a tough comparison with the prior year’s election mail.
40% volume growth in deliveries to lockers and shop collection points highlighted where expansion is coming from, supported by roughly 30,000 non-home delivery locations and partnerships with Vinted and eBay.
£6.9 million in CEO Martin Seidenberg’s pay, up from £2.1 million, came as long-term incentives were triggered after IDS left the London market following Daniel Kretinsky’s £3.6 billion takeover.
75.7% of first-class mail arrived the next working day in the latest service results, underscoring why Royal Mail is rolling out delivery changes and investing in technology and AI after a record £21 million Ofcom fine.