Communications regulator Ofcom has told Royal Mail to improve its service after the newly-privatised firm missed its delivery targets.
Ofcom said Royal Mail had delivered 91.7 per cent of all first class letters on the day after collection in the year to March, falling short of its 93 per cent goal.
The watchdog also said the firm was required to meet a target of 91.5 per cent of next-day delivery for first class post in almost all of the UK’s geographic postcode areas to provide a good level of service across the UK – not just in more densely populated areas.
However, Royal Mail achieved this level in only 62 per cent of the required postcode areas, which exclude the Scottish islands.
City advisers have defended the privatisation of Royal Mail after claims the service was sold too cheaply.
Directors from investment banking giants Goldman Sachs and UBS, which advised Whitehall, told MPs on the business select committee this week that market uncertainty and the float’s complexity contributed to a conservative £3.3 billion valuation.
But shares in Royal Mail, which listed at 330p each, have risen as high as 650p and are currently trading at 545p.
Ofcom said the group was now on a stronger financial footing and it will continue to monitor its performance closely, adding: “Should it miss the targets in future, Ofcom will consider opening a formal investigation which could result in enforcement action, including the possibility of fines.”