Royal Mail has cheered its best festive performance for four years as it notched up higher revenues across letters and parcels and met its Christmas delivery pledge.

The group’s owner International Distributions Services (IDS) said Royal Mail saw a “marked improvement” over the final three months of 2023 after moving on from a long-running dispute with unions over pay and working conditions.

It delivered more than 99% of first- and second-class mail sent by the last postal dates in time for Christmas.

Stamp price increases drove an 11.8% rise in letter revenues in the quarter despite a 6% drop in the number posted as the long-term decline in letter sending continued.

Parcel revenues jumped 14.4% as 21% more were delivered than a year earlier, when the service was impacted by crippling strike action.

The firm said it had “won back customers lost during industrial action”.

IDS is set to post operating profits for its second half, but this will be offset by the £169 million first-half loss, leaving it on track with guidance to “about breakeven” for the full year.

Martin Seidenberg, IDS chief executive, praised “extraordinary efforts” by staff over Christmas.

“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,” he said.

“We need to build on this momentum.”

But despite the improvements, Mr Seidenberg reiterated his call for “urgent action” regarding its obligation to deliver letters six days a week.

He said: “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.”

Royal Mail has asked Ofcom to axe Saturday deliveries, reducing the service from six days a week to five.

Ofcom is expected to publish its recommendations on the universal service this month.