Royal Mail’s half year results shows growth

Royal Mail Group has announced its financial results for the half year ended September 25. The company announced that its group revenue was £4,606m, an increase 4.6% compared to £4,402m over the same period of 2010. Operating profits also increased considerably from £22m in 2010 to £67m in 2011.

Despite the revenue and profit increase, Royal Mail was concerned by the performance of its core Universal Service, which remains loss making. However, the business unit was able to reduce its losses from £55m to £41m for the half year due to tighter cost control and price increases.

In the UK mail market, letter volumes fell 6% compared to a year ago. Conversely, packet volumes rose 5%; despite difficult market conditions.

The group announced that the strong performances in its GLS and Post Office Limited business units steered the Group away from recording an overall loss. GLS recorded profits of £58m for the half year, while Post Office Limited had profits of £55m.

Moya Greene, Chief Executive Officer of Royal Mail Group, said: "Our financial performance at the Group level in the first half of our financial year, including our cash flow, shows some improvement on the same period a year ago. The necessary measures we implemented earlier in the year – increasing our prices and tight cost control – are a key part of our strategy to return Royal Mail to sustained financial viability. They are beginning to deliver results. But, we have a great deal to do.

"We are half way through our financial year and are operating within a difficult and challenging business environment. 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."

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