Royal Mail’s profits double pre-share sale

Tim Wallace
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SOARING margins boosted revenues at Royal Mail in the six months to September and doubled the firm’s operating profits, the postal operator said yesterday.

In the months leading up to its privatisation the group’s revenues increased to £4.52bn – a rise of two per cent on the same period of 2012.

In part that was driven by improving margins – on a like for like basis margins increased 190 basis points to 5.2 per cent.

Parcel revenues helped, growing nine per cent to account for 51 per cent of total incomes. By contrast, letter revenues dipped four per cent.

Meanwhile operating costs held steady at £4.17bn, and operating profits increased from £144m to £283m.

However, chief executive Moya Greene warned threats of industrial action have hit the firm, even though no strikes have taken place recently.

“I’m very optimistic we will reach an agreement soon, hopefully without any disruption to service in this very important time for us,” she told analysts yesterday.

“I’m confident we can get through Christmas with very little disruption, hopefully none.”

It is the first time the company has reported since the government sold a 60 per cent stake last month.

But the timeframe involved covers only the months when the business was still in public ownership.

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