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(Sharecast News) - Royal Mail owner International Distribution Services (IDS) said third-quarter revenues fell as its dispute with workers over pay dragged on.
The postal carrier on Thursday said group revenue for the three months to December 31 came in at £3.3m, down 8.1% year on year. Royal Mail revenue fell to £2m from £2.4m and rose at the GLS division to £1.3m from £1.1m.
IDS said the 18 days of industrial action in the period cost it around £200m. Revenues from parcels - at the heart of the dispute over proposed changes to working practices - fell by 17.8% year-on-year, with volumes down 20%. Letter revenue was down by over 6%, with volumes down 8% excluding some mass mailings for elections.
IDS said it now expected to be cash negative for the year and earned that it would have to sell assets to reverse this position. It continued to target a return to adjusted operating profit in 2024-25.
"Performance continues to be driven by a return to structural decline in letters, weaker retail trends, the impact of industrial disruption (18 strike days year to date), and lower (Covid) test kit volumes," IDS said in a trading update.
It added that it expected an adjusted operating loss around the mid-point of the company's £350-£450m range.
"This assumes no further days of strike action in the fourth quarter and the Communications Workers Union accept a pay settlement in line with the best and final pay offer. The full year outturn will also be subject to potential customer attrition in Q4 and excludes any charges for voluntary redundancy costs," IDS said.
The company added that the number of voluntary redundancies needed to reach its target to reduce the number of jobs equivalent to a full-time post "will be significantly lower" than the 5,000 - 6,000 forecast in an update in October, in part due to "current levels of attrition." It repeated its pledge for no compulsory redundancies.
Reporting by Frank Prenesti for Sharecast.com
