Royal Mail faces huge tax bill while pushing for delivery service changes
British postal giant deals with new financial burden from recent tax changes thatʼll cost them millions yearly. Company looks at different ways to handle costs while waiting for service-rules update
The UK budget update from oct-23 hit Royal Mail with extra costs making its money problems bigger. The company (which has about 130k workers) now needs to pay £120m more each year for worker taxes; this hits them harder than other delivery firms
Their boss Martin Seidenberg says this makes changing mail rules super-important: “We really need to update our old-style delivery rules“. The company still has to bring mail to every UK house 6 days weekly for the same price - which isnt helping their money situation
The companyʼs trying to get more modern with fancy parcel spots and robot-sorting places. Their numbers show some good news though: they made £61m in profit for first-half 23 compared to losing £169m same time last year. However GLS (their world-wide delivery part) isnt doing so well because of higher worker costs in places like Germany; Italy
The companyʼs ready for x-mas deliveries and stays on track with its yearly goals. Meanwhile that big deal where Daniel Kretinsky wants to buy them for £3.57b is still moving forward - they think itʼll all be done by early-25 when they get ok from rule-makers
This makes Universal Service reform even more urgent
The companys shares dropped a bit (0.8%) after all this news came out. Its clear theyʼre gonna need to think hard about prices; automation to handle these new costs
