Royal Mail's letter-delivering business was back in the black in the year to April after four years of losses, taking it much closer to becoming Britain's next massive privatisation project.
The results also helped the chief executive, Moya Greene, to take home more than £1m in a pay packet that makes her one of Britain's best-paid public sector officials.
Royal Mail needed to transform its finances to allow the Government to start selling or floating at least part of the business by its scheduled date of autumn 2013. Yesterday's numbers suggest it is en route to doing so, after the firm's "universal service" letter division – where postmen deliver to 29 million homes a week – returned to profit. Last year's £120m loss was converted into a £23m profit, on revenues of £7.2bn.
Performance-related pay helped Ms Greene to receive a £1.1m remuneration package. Weeks after Royal Mail hit Britons with a record increase in stamp prices she pocketed a £371,000 cash bonus on top of basic pay of £498,000, £371,000 in a "short-term incentive plan", £38,000 in benefits and £200,000 in lieu of a pension scheme contribution.
Ms Greene steered Royal Mail's return to the black despite a continuing decline in the number of letters in the average daily postbag, at 58 million during the year to April, down from 80 million at its peak in 2005. Britons are expected to send even less mail in the post this year, after May's price hikes. First-class stamps now cost 60p, up from 46p, and second-class stamps increased from 36p to 50p. Even before that hike, Royal Mail said in the year to April parcels were the single biggest contributor to group revenues – partly thanks to the online shopping industry.
The numbers will help ministers to make Royal Mail more attractive to potential private-sector bidders. Sale preparations have ramped up in recent months: in March the Government said it would take over the firm's giant pension fund, which saw £28bn of assets and £38bn in liabilities transferred to the state. Last year Royal Mail also axed 4,000 staff.
Ms Greene said: "We are cash positive for the first time in four years."