Royal Mail Reports Rise In Profits
Royal Mail has seen its half-year profits rise, driven by growing revenue from its parcel business, in its first set of results since its shares were listed on London’s stock market.
Pre-tax profits were £233m for the six months to 29 September, up from £94m a year earlier, excluding special items.
But Royal Mail said a one-off windfall resulting from a pension reform boosted overall pre-tax profits to £1.58bn.
A 60% stake in Royal Mail was sold on the London Stock Exchange last month.
The shares went on sale at 330p each, but immediately soared in value, leading to accusations that the sale had been underpriced.
Business Secretary Vince Cable will face a select committee hearing later over concerns the postal service was undervalued.
In its statement, Royal Mail reported that its revenues had grown by 2% on a like-for-like basis to £4.52bn.
It also said parcels now accounted for 51% of its revenue.
But the volume of sales in the parcel business stalled in the summer amid good weather, and Royal Mail has admitted some business was lost to its competitors over the prospect of a strike.
Business from letters continued to decline.
“Our first half financial performance was in line with our expectations of delivering low single digit revenue growth and margin expansion,” said Royal Mail chief executive Moya Greene.
Last week, the regulator, Ofcom, told Royal Mail it must improve “important aspects” of its service.
It said Royal Mail had missed key performance targets, and warned that it could be fined if it missed targets in the future.