Royal Mail delays annual financial results as takeover bid looms

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.”

It comes a week after the company said it was “minded” to agree to a takeover by Czech billionaire Daniel Kretinsky.

Mr Kretinsky, whose EP Group owns a 27.5% stake in the firm, put forward a proposed bid worth about £3.5 billion on May 15.

There have been no further announcements on the deal in the last week, but Business Secretary Kemi Badenoch said the Royal Mail’s universal service obligation will need to be protected in any sale of the firm.

IDS said Mr Kretinsky had agreed to offer a set of “contractual undertakings” to protect key public interest factors recognising Royal Mail’s status as a major part of national infrastructure under the proposal.

This would include commitments to Royal Mail’s plans to keep six-day-a-week first class letter deliveries under the universal service, protect workers’ rights and keep the Royal Mail brand, as well as its UK headquarters and tax residence.

Mr Kretinsky has until 5pm on May 29 to make a firm offer after the City Takeover Panel agreed to extend the so-called “put up or shut up” deadline, which was originally set for 5pm on Wednesday May 15.

Royal Mail, which was privatised in 2013, put forward plans to Ofcom earlier this month to scrap second-class letter deliveries on Saturdays and cut the service to every other weekday as part of overhaul efforts.

In its submission to Ofcom’s consultation on the future of the universal postal service, Royal Mail said it would keep a six-day-a-week service for first-class mail in a climbdown on previous calls for all Saturday letter deliveries to be scrapped.

Shares in IDS were trading 2% down on Thursday afternoon.

KPMG declined to comment.