Royal Mail claims that its modernisation programme is starting to reap benefits after seeing revenues up 5% and pre-tax profits more than triple those seen in the same period in 2010.
Group revenues for the six months up to September 25, 2011, rose £204m to a total of £4.6bn, while operating profits including modernisation costs increased by £45m to £67m.
But this has come at a price. The modernization has been ‘painful for staff’ with 5,000 jobs being axed. Letter volumes are also still falling and the Universal Service lost £41m, although this is an improvement on last year’s £55m loss.
Chief executive Moya Greene said the measures were “beginning to deliver results”.
“We have a great deal more to do,” she added. “The economic downturn is proving to be prolonged and, like many other predominantly UK and European-based companies, our trading conditions are challenging.
“Our focus therefore remains on returning to sustained financial viability. We will continue to reduce our costs wherever possible without compromising the six-days-a-week service.”
Royal Mail is currently awaiting EU State Aid clearance for the UK government to take on its historic pensions liability and help restructure its balance sheet.
The CWU postal union said the modernisation had been “difficult” for postal workers and customers and it was time for Royal Mail to reward staff.
David Ward, deputy secretary, said “Royal Mail workers know what’s going on in terms of competition and change in the industry,” said Ward. “The crucial thing is to reward and motivate postal workers.”
