Postal service company Royal Mail, following its £3.6 billion acquisition, projects a return to profitability in their initial financial reports.

Royal Mail, a key component of the IDS group, has witnessed significant changes in recent times. The company, which also includes Royal Mail, recently completed a takeover by Czech billionaire Daniel Kretinsky's EP Global Commerce GmbH group. As a result, Royal Mail has become the first international postal operator in its more than 500-year history to be under foreign ownership.

The takeover, valued at £3.6bn, saw Kretinsky formally leave the London Stock Exchange in June 2023. He has since been appointed as the new chairman of Royal Mail, pledging to uphold the Universal Service Obligation (USO) after the takeover.

The takeover deal also saw the UK Government receive a £1 golden share, a move that has raised some eyebrows but is common in such transactions.

IDS, which is expected to post figures for the 12 months to 31 March, has reported a 0.8% increase in group revenues to £3.6bn, partly due to a parcel boost over Christmas. Royal Mail parcel revenues rose 2.5% to £1.02bn in the quarter, with a better performance internationally contributing to this increase.

However, Royal Mail is facing a £120m hit from the incoming national insurance tax hike and may consider job cuts or price hikes to offset the blow.

In other news, IDS's third quarter update showed international revenues jumped 6.6% to £227m. This growth is a positive sign for the company, which stated in January that it is on course to return to annual adjusted operating profit in 2024-25, despite a difficult market environment.

The company has also been dealing with operational issues. An investigation was launched in May after Royal Mail only delivered just over three-quarters of first-class post on time last year. In an attempt to address these issues, Ofcom has approved reforms allowing Royal Mail to change second-class letter deliveries to every other weekday, starting from 28 July.

Furthermore, changes are coming to the import duties and taxes for goods valued at $800 or less, effective from 29 August. This could impact around 30% of IoD member firms exporting to the US, with smaller companies predominantly affected. To mitigate these changes, Royal Mail has introduced new postal delivery duties paid (PDDP) services due to new US customs requirements.

In a more positive development, Royal Mail will be the first international postal operator to offer new services for sending goods to the United States, effective from 29 August. This move is expected to boost Royal Mail's parcel business further.

These changes mark a significant period in the history of Royal Mail and the IDS group. As the company navigates these challenges and opportunities, it remains to be seen how these changes will shape the future of the postal service.