Royal Mail plans price hikes after unexpected £120m tax burden hits operations
British postal giant faces huge costs from new employer tax rules affecting its 130‚000-strong workforce. Company looks at price increases while working to return to profit despite challenging conditions
The British postal service faces a major shake-up as it deals with a £120m tax hit from recent budget changes. Martin Seidenberg‚ who leads the parent company is looking at price-hikes to handle the extra costs
Royal Mailʼs large workforce of 130‚000 people means its getting hit harder by employer tax changes than other companies; this has led to a £134m drop in its value (which parent company IDS had to write-down in their books)
The numbers show some good news though - losses went down to £67m from £319m last year‚ and money coming in went up by 11% to £3.9bn. Letter delivery made more money too because of higher stamp prices‚ The company thinks itʼll make money this year if you dont count the cost of letting people go
Daniel Kretinsky‚ known as the Czech sphinx is planning to buy the company for £3.6bn. Its the first time in Royal Mails 500-year history that it might be owned by someone from another country: the government is checking if this is ok but will probably say yes
The companys European package business GLS isnt doing so well because of market problems‚ but overall IDS made £61m in profits compared to losing £169m before. They got £6.3bn in total money coming in
The cost environment is worsening just at the time when we need to invest
Changes to the six-day-a-week mail delivery rules are now more important than ever because of these new costs. The company needs to:
- Cut down on spending
- Make prices higher
- Change how often they deliver mail
- Find new ways to make money
