A difficult year for everyone...

...but reasons to be optimistic.

Our full results for 2022-23 paint a mixed picture of obstacles and optimism as we enter a new financial year focusing on rebuilding trust, restoring high standards of service and returning Royal Mail and Parcelforce to profit.

We’ve made progress to stabilise the business and improved our customer offering. Our achievements over the past year include reaching agreement with the CWU, subject to ballot, and making good progress on our Steps to Zero environmental plan – read more on page 16. We reached 76% parcel automation by the end of the financial year – a figure which continues to increase and has now reached 80%. We’ve also improved our customer offering with new products and services, and growing Sundays and Parcel Collect.

Focus on improving Quality of Service

Despite making progress in many areas, we’ve fallen short of the high quality of service standards our customers expect. To 26 March 2023, Royal Mail delivered 90.7% of Second Class mail within three working days (95.2% adjusted for the impact of strike action) and 73.7% of First Class within one working day (81.5% adjusted).

In the fourth quarter of the year, 94.5% of Second Class mail was delivered within three working days and 78.9% of First Class was delivered within one working day.

This has been one of the hardest years in the company’s history with Quality of Service damaged by the long-running industrial dispute, compounded by high levels of absence, which has continued to affect our operational performance.

But the fact remains that it’s still below where we – and our customers – want it to be. Restoring our service to the high standards our customers expect has to be our top priority.

Rebuilding trust

As we enter the new financial year, there’s reason for us all to be optimistic. But we must deliver the changes outlined in the negotiators’ agreement with the CWU and improve quality at the same time.

With that, we can grow the business to show a return to Group profitability this year (2023-24) and see Royal Mail itself in profit the year after.

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What is ‘impairment’?

The industrial dispute and ongoing risk to our business mean that we’ve had to write down the value of the Royal Mail business by £539 million to £900 million. This is on top of the £419 million loss. This known as an ‘impairment’ and is a non-cash accounting adjustment, required under accounting rules.

Adjusted operating loss:

-£419 million Reported operating loss of £1.04 billion, including impairment

Market share, domestic parcels:

Revenue: £7.4 billion

Our full-year results provide details of the financial performance of International Distributions Services, including breaking out performance for Royal Mail and GLS. Parcelforce performance is not split out separately, but it is now materially loss making. That is why optimising the synergies between the Royal Mail and Parcelforce networks, and the Strategic Review we are undertaking as part of the CWU agreement, are so important for Parcelforce’s future.

13 % DOWN

DOWN UP compared to pre-Covid volumes

4 %

2 % Domestic parcel volumes: 1.1 billion1

DOWN

9 %

22% DOWN

Letter volumes: 7.3 billion3

1 Excludes International volumes.

2 Parcel automation now 80% at May 2023.

3 Addressed letters, excluding elections.