What a remarkable coincidence. Just four months after falling into foreign hands for the first time in its 508-year history, Royal Mail has magically managed to return to profit by doing what recently-privatised companies do best: gutting public services and calling it a “turnaround.”
The postal service reported £12 million in operating profits for the year ending March 2025, compared to a £336 million loss the previous year. While these figures technically predate Czech billionaire Daniel Kretinsky’s £3.6 billion takeover in April, the timing of celebrating these results alongside systematic service cuts tells you everything you need about the new ownership’s priorities.
The Service Cuts That Made the Return to Profit Possible
Let’s be clear about how this “turnaround” was achieved. Royal Mail has embarked on a systematic dismantling of services that British communities have relied on for centuries.
Saturday second-class deliveries have been scrapped entirely, with the company estimating it will take up to 18 months to fully implement these cuts nationwide.
This isn’t just an inconvenience, it’s the erosion of a universal service that was designed to connect every corner of Britain regardless of profitability.
The company is also trialling alternate weekday deliveries for second-class post, potentially saving up to £300 million annually by simply not bothering to deliver mail when it’s not convenient for their bottom line.
Meanwhile, Royal Mail’s delivery performance remains catastrophically poor, with only 75.9% of first-class mail arriving on time, well short of Ofcom’s already-lowered 93% target.
Customers Pay More for Less Under Foreign Ownership
The cruel irony isn’t lost on anyone paying attention. While slashing services left and right, Royal Mail increased first-class stamp prices to £1.70 in April (the same month Kretinsky’s takeover completed).
So customers are now paying premium prices for a degraded service that fails to deliver one in four letters on time, while Saturday deliveries disappear and the company celebrates returning to profit.
Martin Seidenberg, chief executive of International Distribution Services (Royal Mail’s parent company), had the audacity to call this “an important milestone in the company’s turnaround” while admitting customers should “take it with a pinch of salt because we still have a lot to do.”
That’s corporate speak for “we’ve only just started gutting your postal service.”
The Foreign Ownership Nobody Asked For
Kretinsky’s takeover marked the end of an era. Royal Mail had remained in British hands since being founded by Henry VIII in 1516. For nearly five centuries, it operated as a public service designed to serve communities, not shareholders.
The Czech billionaire, who already owns stakes in West Ham United and Sainsbury’s, has saddled Royal Mail with approximately £5 billion in debt through his highly-leveraged acquisition.
This debt mountain creates enormous pressure to cut costs wherever possible, making universal service obligations an obvious target.
His track record with the Dutch postal service PostNL, which recently admitted its business model is “no longer sustainable,” hardly inspires confidence about Royal Mail’s future under foreign ownership.
The Deliberate Decline Strategy Exposed
Industry critics, including MP Kate Osborne who worked for Royal Mail for 25 years, have accused the company of deliberately undermining services to justify cuts to the Universal Service Obligation.
The pattern is becoming increasingly clear: poor performance justifies reduced targets, which justify service cuts, which justify higher prices for reduced service.
This ultimately undermines public confidence in the universal service itself, making privatisation and profit extraction seem inevitable rather than a political choice.
Despite facing record fines totalling more than £16 million for missing delivery targets, Royal Mail has treated regulatory penalties as just another cost of doing business while pressing ahead with service reductions.
A National Asset Stripped for Private Profit
What we’re witnessing is the classic privatisation playbook applied to one of Britain’s most essential public services. Buy a struggling public asset, load it with debt, cut services to generate profit, then claim this represents “modernisation” and “efficiency.”
The £120 million hit Royal Mail took from National Insurance increases following Rachel Reeves’s Budget has been cited as another justification for cuts, with executives complaining they were “disproportionately” affected compared to competitors who operate “very different labour models.”
Translation: having 130,000 employees to provide universal coverage is expensive when you’re trying to maximise profits rather than serve the public interest.
The Loss of a 500-Year Public Service
For centuries, Royal Mail’s universal service obligation meant that sending a letter from the Shetland Islands cost the same as posting one in central London.
This wasn’t profitable, it was a public service that recognised communication as essential infrastructure for a connected society.
Under foreign ownership, that principle is being systematically dismantled in favour of profit maximisation.
The “postboxes of the future” with solar panels and parcel capabilities are nice PR stunts, but they don’t disguise the fundamental shift from public service to private profit extraction.
What This Means for British Communities
While Kretinsky celebrates his profitable investment, British communities will bear the real cost of this “turnaround.”
Rural areas will face reduced service frequency, vulnerable customers who rely on postal deliveries will find their lifeline increasingly unreliable, and small businesses will pay more for worse service.
The government’s retention of a “golden share” to approve major changes sounds reassuring until you realise they’ve already approved the foreign takeover and service cuts that made this profit possible.
The irony is bitter: a postal service that successfully connected Britain for five centuries has been transformed into a vehicle for foreign profit extraction within months of falling into private hands.
For a company that once symbolised public service and universal access, Royal Mail’s return to profit under foreign ownership represents everything wrong with privatising essential infrastructure: higher prices, worse service, and profits extracted from what should remain a public service serving communities rather than shareholders.
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