Crozier hails Royal Mail's 'transformation'

The Royal Mail is making £1 million a day and delivering more than nine out of 10 first class letters on time, the organisation reported today.

The Royal Mail is making £1 million a day and delivering more than nine out of 10 first class letters on time, the organisation reported today.

Chief executive Adam Crozier said the group was being "transformed" under a massive modernisation programme which had delivered profits of £217 million in the first half of the current financial year.

The company was now on course to make profits of £400 million in the full year, which will trigger payments of at least £800 to every postal worker in the UK.

The number of first class letters delivered a day after posting was 92.1 per cent in the three months to September, almost 4 per cent better than the quarter to June and one of the best performances of the past decade, although still below the target of 92.5 per cent.

Second class deliveries were 98.6 per cent, above the target of 98.5 per cent.

The Royal Mail said it was on course to complete its turnaround from 2002, when it was losing £1 million a day.

The letters business made a profit of £261 million in the half year, £89 million more than the same period a year ago, while losses at Post Office branches fell from £90 million to £52 million.

Royal Mail chairman Allan Leighton, said: "No-one should doubt or under-estimate the scale of task we have tackled. We are delivering a massive modernisation programme, restoring profitability and driving up service to customers. Royal Mail is being transformed.

"Recently, there have been few plaudits for postmen and women but I believe they can take pride in the progress achieved since Royal Mail's three-year renewal plan was launched two and a half years ago.

"The focus on achieving consistent, high quality service - Royal Mail's number one priority - is showing positive results.

"We are succeeding in modernising the letters business. Nearly 20 years after it was first proposed, a single daily delivery to every address has become a reality."

The amount of lost mail has been halved, customer service was improving and postal workers were on a five day week, with most getting at least £300 a week, said Mr Leighton.

"The £400 million target is achievable if everyone in Royal Mail keeps focusing on improving service and efficiency.

"A Share in Success payment will be recognition that it's the postmen and women's dedication and commitment that is turning round Royal Mail."

Mr Crozier said the operational changes to introduce a single daily delivery, streamline the transport operation and improve efficiency at mail centres were now almost complete and had mostly been accomplished in a 12-week period last spring.

"Unfortunately, quality of service dipped during the spring given the intensity and range of the operational changes we were implementing.

"We have apologised for the dip in service and our thanks go to customers for their patience during this period."

Mr Crozier said an "excess" of targets were not helping the Royal Mail, adding that prices would have to be "rebalanced" over the next few years.

Around 7,200 workers left the Royal Mail in the six months to September, all voluntarily, taking the total reduction to 34,300 since the renewal plan was launched in 2002.

The consumer watchdog Postwatch complained that the Royal Mail had failed to achieve 14 of its 15 performance targets and that compared with the same period last year services had deteriorated.

The delivery of first class letters had got worse over the past year and more than 200 million first class letters were not delivered the next day during the first six months of the current financial year.

Postwatch chairman Peter Carr said: "Customers are facing new price increases while service standards continue to fail the targets, yet Royal Mail profits are expected to double to £400 million-plus.

"Customers are paying for the profits without receiving the service. Prices should not increase until service standards are achieved."

Postwatch said that Wigan was the best performing area in the UK with 93.8% of first class mail delivered the next day, closely followed by Sheffield (93.6%) while Oxford was the worst performing at 80.6 per cent.

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