23 May 2024 , 11:02
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The owner of Royal Mail has indefinitely delayed the release of its annual trading update, originally scheduled for early Thursday morning, as the group heads towards a potential overseas takeover.
London-listed International Distribution Services (IDS) said its auditor, KPMG, has asked for more time to complete its work on the results statement. The company did not give a new date for publishing its results.
IDS had originally told markets it would publish its full-year financial results at 7am on Thursday, but failed to publish in the morning. Shortly after 1.45pm, it said in a statement: “The Group’s auditor, KPMG, has requested additional time to complete the usual standard procedures after their internal reviews were late in the audit timetable, thereby delaying their final audit process.”
IDS said adjusted operating profit – a measure of the company’s income which does not include some one-off costs like those associated with layoffs – to be “broadly in line” with expectations. “A further announcement on updated timings for the publication of results will be made as soon as reasonably practicable.”
This delay follows just days after the firm said it was "minded" to agree to a takeover bid by Mr. Kretinsky, who already holds a 27.5% stake in the business and proposed a deal worth around £3.5billion on May 15.
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While the business world awaits further news on the acquisition, Business Secretary Kemi Badenoch has insisted that Royal Mail's obligation to provide universal service must be safeguarded in any potential sale. IDS has confirmed that Mr. Kretinsky is prepared to give "contractual undertakings" to protect vital public interests, acknowledging Royal Mail's key role in national infrastructure.
These promises would cover maintaining six-day-a-week first class letter deliveries as part of the universal service, upholding workers' rights, and preserving the Royal Mail brand, along with its UK headquarters and tax residency. Mr. Kretinsky has until 5pm on May 29 to present a concrete offer, following the City Takeover Panel's decision to push back the initial "put up or shut up" deadline from 5pm on Wednesday May 15.
Royal Mail, privatised in 2013, proposed to Ofcom earlier this month to eliminate second-class letter deliveries on Saturdays and reduce the service to alternate weekdays as part of a revamp. In its response to Ofcom's consultation on the future of the universal postal service, Royal Mail pledged to maintain a six-day-a-week service for first-class mail, backtracking on previous demands for all Saturday letter deliveries to be abolished.
Shares in IDS were trading 2% down on Thursday afternoon. KPMG declined to comment.