Royal Mail Posts £430m In Full-Year Profits

Written By Unknown on Kamis, 22 Mei 2014 | 14.47

Royal Mail has reported an operating profit of £430m in its first full-year results since privatisation.

The figure for the 12 months to March, after transformation costs, is up from £403m in the previous year - a rise of 6.7%.

But the company warns it is facing a number of "headwinds" including increasing competition in parcels.

It also warned a move to direct delivery of letters by rivals TNT  Post could threaten the financial sustainability of the universal service without action by the regulator Ofcom.

Parcels now contribute more than 50% of Royal Mail's revenue - £4.82bn - after a 7% rise, although volumes remained flat.

The group's letters performance was at the better end of expectations, with revenues down 2% to £4.6bn on a year earlier.

The amount of letters fell by 4%, but the trend improved over the year due to better economic conditions and one-off factors such as energy companies writing to customers about price rises.

The Government still own a 30% stake in the firm, which was sold off last autumn.

Chief executive Moya Greene said: "The competitive environment on the parcels side is more intense. We are taking steps to remain the leader in this growing market."

The privatisation of Royal Mail in October was heavily criticised for not delivering value for money for the taxpayer.

The Government robustly defended the sale against sharp criticism from the National Audit Office, which found that "deep caution" shown by ministers when pricing shares in the Royal Mail cost the taxpayer more than £1bn.

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