Royal Mail heralds return to profit

A combination of swingeing jobs cuts, prime-site property sell-offs and an increase in parcel business have helped Royal Mail return to profit for the first time in four years, according to its latest results.
Overall, Royal Mail’s operating profit rose to £211m from £39m, on revenues that were up by 4% to £9.5bn. The letters and parcels business recorded an operating profit of £23m, after modernisation costs, on revenues of £7.2bn in the year ended March 25. Last year that part of the business posted a loss of £120m.
Chief executive Moya Greene said: “Royal Mail Group has made significant progress over the last year, successfully addressing cashflow, profitability and balance sheet issues. We are cash positive for the first time in four years, our profitability is improving and we no longer have ‘going concern’ issues.
“We have a clear strategy in place and it is delivering results. We are addressing the structural decline in the traditional letters market by improving efficiency across our operations and adapting our network to accommodate the ever-increasing number of parcels being sent.”
The move comes as rival TNT Post says that plans to roll out its new delivery service could create a further 20,000 jobs in the next five years.
The UK postal market has been open to competition since 2006, but in practice most private sector postal companies only collect and process mail, before handing it to Royal Mail to be delivered. Royal Mail currently delivers around 99% of UK mail.