Royal Mail’s operating profits plummet – here’s why

• Royal Mail 's annual operating profits more than halved to £96 million, down from £198 million, primarily due to soaring labour costs, including minimum wage increases and an extra £133 million employee tax bill.
• Its owner, International Distribution Services ( IDS ), reported a more than two-thirds drop in overall pre-tax profits to £141 million, with its GLS parcel arm also experiencing a decline in earnings.
• Royal Mail saw parcel volumes rise by seven per cent to 1.4 billion, but addressed letters fell 10 per cent to 5.7 billion.
• Royal Mail is pressing ahead with changes, which include delivering second class post every other weekday and discontinuing Saturday deliveries across the UK, following an agreement with trade unions.
• Regulator Ofcom launched an investigation earlier this month into the firm’s failure to meet its delivery targets over the past year.

IN FULL

Royal Mail sees annual earnings tumble as employee costs surge