Royal Mail announces £211m profits

The Royal Mail posted improved profits of £211m today (Rex Features)

The Royal Mail posted improved profits of £211 million today, saying it was on the way to restoring the group's financial health.

Revenues increased by 4% to £9.5 billion in the last financial year and the Royal Mail Group said it was cash-positive for the first time in four years

The core postal business, which delivers the six-days-a-week universal service to 29 million addresses, is back in the black after four successive years of losses, making a profit of £23 million on revenues of £7.2 billion, up from a loss of £120 million last year.

The group's operating margin after modernisation costs improved to 2.2% from 0.4% last year, to £211 million from £39million.

The group's European parcels business GLS and the Post Office business accounted for 89% of the profits after modernisation costs.

GLS increased revenues by 5% to £1.6 billion and profits were up 8% to £128 million, while Post Office Limited revenues grew by 3% to £801 million, making profits of £59 million.

Royal Mail said it was now a going concern after the Government took on its pension liabilities under moves to part-privatise the business.

Moya Greene, Royal Mail's chief executive, said: "Royal Mail Group has made significant progress over the last year successfully addressing cash flow, profitability and balance sheet issues. We are cash-positive for the first time in four years, our profitability is improving and we no longer have going concern issues.

"We have a clear strategy in place and it is delivering results. We are addressing the structural decline in the traditional letters market by improving efficiency across our operations and adapting our network to accommodate the ever-increasing number of parcels being sent.

"We recognise, however, that there is much more to be done. Our commitment to executing our strategies is key. Our increased focus on the parcels market and our growing international businesses is helping to build a strong commercial future for the group."

PA