IDS has also appointed a new group CFO who has replaced long-serving executive Mick Jeavons.
Michael Snape has joined the board with immediate effect. He was most recently CFO at Boots, its sister business No7Beauty Company, and the international business at Walgreens Boots Alliance.
Jeavons joined Royal Mail in 1993 and has held a number of senior roles at the group. He was corporate finance director at the time of Royal Mail’s privatisation in 2013 and was also chief of staff to the then-CEO.
He has been on the IDS board since January 2021.
Jeavons has stepped down from the board but will work with Snape for a handover period before leaving the business on 31 May.
IDS group CEO Martin Seidenberg said he was delighted to announce Snape’s appointment.
“Michael brings extensive turnaround experience and excellent financial leadership gained in a number of leading international companies during their transformation. I look forward to working closely with him to ensure that both Royal Mail and GLS reach their full potential.
"Mick has been a great colleague and his counsel, knowledge and experience have been invaluable to both myself and the board over the last few years. We thank him for his outstanding contribution through some turbulent times, and wish him every success for the future."
Seidenberg is also in the process of finding a new CEO for the Royal Mail business.
Snape’s base salary will be £487,000, nearly 12% higher than Jeavons’ base salary of £435,000. However, Snape’s 13.6% pension allowance is lower than Jeavons’.
Snape commented: “I am delighted to be joining IDS at such a pivotal time and am excited by the renewed level of ambition that Martin and the board have for both Royal Mail and GLS.
“I look forward to helping drive the turnaround of Royal Mail and the continued growth in GLS to deliver for our customers, our colleagues and our shareholders.”
In its trading update for the nine months to 31 December 2023, IDS said that Royal Mail had achieved “its best Christmas operational performance for four years, and met our customer commitment to deliver items posted by the last recommended posting dates in time for Christmas”.
IDS said Royal Mail had also won back customers after the industrial action that blighted last year.
Group sales rose by 9.8% year-on-year.
IDS expected to post an adjusted operating profit in H2 that will “broadly offset the £169 million operating loss in the first half”, so its guidance for the full year remains at about breakeven excluding voluntary redundancy costs.
In the three months to 31 December, total parcel volumes at Royal Mail were up 21%, while addressed letter volumes were down 6%.
However, the comparative period in 2022 was also impacted by the long-running strike action by CWU members that spanned 2022-23.
Seidenberg stated: “I would like to thank all my colleagues across Royal Mail and GLS for their extraordinary efforts delivering Christmas for our customers. This has led to a marked improvement in both trading and operational performance for Royal Mail over Christmas and we have continued to win-back customers. We need to build on this momentum.
“With Ofcom due to publish options for the future of the Universal Service imminently, now is the time for urgent action. We are doing all we can to transform, but it is simply not sustainable to maintain a delivery network built for 20 billion letters when we are now only delivering seven billion.”
Shares in IDS rose by 5.2p, or 2.11%, to 251.10p following yesterday's announcements.
