Partly Cloudy

Partly Cloudy

max temp: 22°C

min temp: 14°C

ESTD 1874 Search

UK: Increased profit for Royal Mail despite decline in letter volumes

10:19 22 May 2014

Royal Mail today announced increased profits in its first set of results since last year

Royal Mail today announced increased profits in its first set of results since last year's flotation.

PA Wire/Press Association Images

Royal Mail has announced an increase in annual profits after revenues growth from parcel deliveries more than offset a further decline in letter volumes.

shares

In its first set of results since its controversial £3.3billion stock market flotation in October, the company said operating profits after transformation costs were £430million in the year to March 30, against £403m a year earlier.

It said its letters performance was at the better end of expectations, with revenues down 2% to £4.6bn on a year earlier. Addressed letter volumes declined by 4% but the trend improved over the year due to stronger economic conditions and one-off impacts such as energy companies writing to customers about price rises.

Parcel revenues increased by 7% but in volume terms the 1bn items delivered in the period was flat compared with the previous financial year.

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.”

As the “Universal Service” provider, Royal Mail is required to provide access to competitors such as TNT for final mile deliveries.

Ofcom is investigating a complaint from TNT over Royal Mail’s decision to change conditions and increase the prices it charges to deliver post collected and pre-sorted by its competitors.

Royal Mail believes an investigation into this complaint will lead to a long period of uncertainty around the prices it charges other postal operators.

Ms Greene called for “timely regulatory action” to prevent the impact of direct delivery competition from undermining the economics of the Universal Service.

She said: “TNT Post UK can cherry-pick easy-to-serve urban areas, delivering easy-to-handle post to homes less frequently than Royal Mail and to no defined quality standard.

“Royal Mail is required to deliver six days a week, overnight, throughout the whole country, to stringent quality standards and at a uniform, affordable tariff.

“Moreover, we are also required to deliver any items TNT Post UK does not consider economic to deliver itself. If TNT Post UK is successful in delivering its stated objectives, this could threaten the fundamental economics of the Universal Service.”

An Ofcom spokesman said: “We do not believe that there is presently a threat to the financial sustainability of the universal postal service.

“Ofcom keeps the market under constant close review, examining the future business plans of major operators. We have a duty to secure the Universal Service, and if we identify any future threat we have powers to step in to protect it.

“We would expect Royal Mail to take appropriate steps to respond to the challenge posed by competition, including improving efficiency.”

Royal Mail continues to expect UK-addressed letter market volumes to decline by 4% to 6% a year, although in the current period it will be helped by this month’s European and local elections and economic improvements.

Since 2003, more than 50,000 people have left the UK business, with 12,000 leaving in the last four years. In March, the company launched a consultation with unions on a proposal to achieve a net reduction of 1,300 roles.

shares

0 comments

Welcome , please leave your message below.

Optional - JPG files only
Optional - MP3 files only
Optional - 3GP, AVI, MOV, MPG or WMV files
Comments

Please log in to leave a comment and share your views with other East Anglian Daily Times visitors.

We enable people to post comments with the aim of encouraging open debate.

Only people who register and sign up to our terms and conditions can post comments. These terms and conditions explain our house rules and legal guidelines.

Comments are not edited by East Anglian Daily Times staff prior to publication but may be automatically filtered.

If you have a complaint about a comment please contact us by clicking on the Report This Comment button next to the comment.

Not a member yet?

Register to create your own unique East Anglian Daily Times account for free.

Signing up is free, quick and easy and offers you the chance to add comments, personalise the site with local information picked just for you, and more.

Sign up now

The Secretary of State for Energy and Climate Change, Rt Hon Amber Rudd MP is at Ickworth Park in Horringer to officially open the new biomass boiler. Amber Rudd is pictured with L-R: Jonathan Rhodes (programme manager - Ickworth), Dee Gathorne-Hardy (senior ranger) and Patrick Begg (programme director - Ickworth).

The Secretary of State for Energy and Climate Change will visit Suffolk today to officially launch a major new environmentally-friendly installation at Ickworth Estate.

Post Office

The branch on High Street will be shut for two weeks and is set for longer opening hours after works.

John Cox of NatWest.

The East of England witnessed the slowest rate of growth of any region or nation in Great Britain during the first three months of 2015, according to a study by the Royal Bank of Scotland group.

Mark and Spencer has posted a drop in quarterly clothing sales, after a colder May impacted demand for its spring and summer collections.

High street giant Marks & Spencer today posted a drop in quarterly clothing sales, after a colder May impacted demand for its spring and summer collections.

015 Flippie 1

A social media start-up which aims to rival the likes of Facebook and LinkedIn says it has won a significant investment ahead of its autumn launch.

Mark Rigby, chief executive of business rates specialist CVS.

The Valuation Office Agency (VOA) is facing a backlog of more than 280,000 appeals over business rates.

British Chambers of Commerce director general John Longworth.

Fresh signs are emerging of “two tier” growth in the UK economy, with firms within the services sector peforming markedly more strongly than those in manufacturing, according to a new study.

From left, John Nicholson,  Andy Bloomfield  and Chris Pont of IJYI.

Ipswich-based software development firm IJYI has taken on its second apprentice in the space of six months.

Students at UCS in Interior Architecture and Design, have been taking part in a design competition to design an entrance canopy for the St Edmunds House apartments in Rope Walk.
Ross Carroll, director of Crown House Homes, left, with course tutor Dr Liana Psarologaki, and Annali Hubbard of Palmer & Partners estate agents, and some of the course students, Elliott Jones, Bryony Briggs, Dan Hutton, Amy Schuller and Michelle Villar

Apartment developers hold a design competition with university students

A member of staff at N2S bagging up scrap computer components ready for further destruction and recycling.

A Suffolk-based computer equipment lifecycle management company is celebrating after achieving accreditation allowing it to work at the highest level of Government.

Most read

Most commented

Topic pages