Heavy Rain

Heavy Rain

max temp: 11°C

min temp: 6°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

Fallen trees in high winds have closed roads in Suffolk

Strong winds early today have brought down trees and power lines around the county, causing disruption for morning travellers.

Ipswich Crown Court

A Suffolk nightclub owner who shoved a man in the chest causing him to fall backwards and hit his head on the pavement has been warned he is facing a jail sentence after admitting manslaughter.

Povey hurled bottles towards Tesco staff because he wanted to go back to prison

A homeless man caused Tesco staff to “run for their lives” as he hurled bottles of alcohol towards them because he wanted to return to prison, a court heard.

Homes are included in the plans. Library image.

Plans for a large-scale development off the A120 at Ramsey creating more than 1,000 jobs have been tipped for approval tonight.

An impression of the possible development of the island site with the double bridge over the lock in the foreground.

A road crossing across Ipswich’s wet dock would lead to more traffic and pollution, transport campaigners have said.

One person has been injured in a crash on the A11 this morning.

Home Secretary Theresa May is launching Conservative candidate for Colchester Will Quince's campaign.

The Home Secretary visited Colchester today to launch the Conservative candidate’s manifesto.

Hen harrier chicks at a nest - the species has become a symbol of UK bird of prey protection efforts.

A top naturalist and TV presenter really got to the art of the matter in his fight against illegal bird and animal persecution - and used a Constable masterpiece to make his point

Sudbury Town Centre. North Street.

Police are treating the sudden death of a man in Sudbury as unexplained.

Thomas the Tank was a favourite of Callum Maclean

It’s been a tad nostalgic in the office this week, writes Kate Dodd. A flippant mention of favourite TV as a child, and the chat turned all misty-eyed and heart felt.

Most read

Most commented

Topic pages