Royal Mail owner fails to publish results

Royal Mail’s owner has delayed reporting its full-year financial results after auditor KPMG requested more time to complete a review, increasing investor concerns as the lossmaking company faces a takeover bid from Czech billionaire Daniel Křetínský.

Investors had been awaiting an update from International Distribution Services at 7am on Thursday, after Křetínský’s EP Group launched a $5bn takeover bid this month.

But during a chaotic morning, the owner of the UK’s 508-year-old postal service repeatedly put off the results, eventually disclosing that KPMG had “requested additional time to complete the usual standard procedures”.

Shares in IDS dropped 4 per cent to 313.2p by late afternoon on Thursday.

The delay marks the latest in a string of disruptions for Royal Mail and its investors, some of which have been taken aback by Křetínský’s bid for the former state-owned postal group.

It has added to shareholders’ frustration as Royal Mail struggles to turn a profit amid declining demand for letter deliveries and an acrimonious dispute with workers that led to 18 days of strikes in 2022.

Even after reaching a deal with the postal workers’ union last year, management has faced difficulties restoring service levels and profits in the face of growing competition from the likes of Amazon and DPD.

“What a shambles at IDS,” said one top investor, referring to the delayed results.

Royal Mail told the Financial Times at 7.20am that a media call to discuss the results at 8.15am “may be delayed”. About 20 minutes later it told reporters this call would also be postponed but that it expected to release the results “in the next hour or so”.

At 1.50pm, IDS eventually disclosed that KPMG had not completed its internal review of the audit on time, delaying the conclusion of the process. KPMG declined to comment.

IDS added that the results, which it expected to show the company breaking even on an adjusted basis, would be published “as soon as reasonably practicable”.

The delay to the results comes after IDS chair Keith Williams said last week that the group was “minded to recommend” an upgraded offer from EP Group, which holds a 27.5 per cent stake, setting the path for a potential foreign takeover that has drawn the attention of UK politicians.

After meeting IDS’s management, business and trade secretary Kemi Badenoch “emphasised the importance of the Royal Mail in British society”, while welcoming commitments to maintain its UK headquarters and its universal service obligation to deliver letters and parcels across the country for the same price.

Raising the spectre of business disruption, the postal workers’ union has threatened further strike action if Křetínský fails to follow through on these commitments.