Soaring profits at Royal Mail lift float plans

 
Suzie Neuwirth
ROYAL Mail said yesterday that its profits have surged by 60 per cent this year, as the government’s plans for a privatisation of the postal service move ahead.

The company announced pre-tax profits of £324m for the year ended 31 March 2013, compared to £201m in 2012.

The firm, which the government hopes to sell off within the year, saw its revenues rise to £9.3bn from £8.8bn over the period.

The rise of internet shopping has driven up parcel volumes, while price rises and cost cuts at Royal Mail also contributed to the strong results.

“The transformation of Royal Mail is well underway,” said chief executive Moya Greene, as she highlighted Royal Mail’s successful parcels and online businesses as being key to future growth.

“Parcels are a major contributor to group revenue, accounting for almost half,” said Greene. “Our strong brand, extensive networks and high quality of service, makes us well placed to benefit from our leading position in the parcels market.”

Revenue from parcel deliveries grew 13 per cent while letter revenues were up three per cent on a like-for-like basis, despite a fall in volumes.

The government has said it plans to privatise Royal Mail by early next year, but yesterday business secretary Vince Cable hinted a stock market flotation could come even sooner – possibly by this autumn.

“That’s the one we are looking at – but we have an open mind,” Cable told the BBC’s Today programme.

However, the trade union Unite – which represents over 7,000 Royal Mail managers – warned the government against selling off the “family silver” to make a quick buck.

“Today’s rise in profits is down to the hard work of the workforce and the loyalty of Royal Mail customers who will face rising prices if the sell-off goes ahead,” said Unite national officer Ian Tonks.