Royal Mail profits fall as it looks ahead to Christmas and eCourier boost

The first half results come the day after Royal Mail expanded its parcel operations with the acquisition of eCourier

Royal Mail has shrunk its staff by 3000 (PA)

Royal Mail profits before tax fell 16 per cent to £240 million in the six months ending September compared to the £287 million in same period in 2014, in what the company said was a "resilient performance" in a "challenging market".

Revenue was flat, with the growth in UK and European parcels offsetting poor revenue from letters in the UK.

The company said operating costs for the full year would be 1 per cent lower, following cost-cutting including the voluntary redundancy of some 3000 employees.

"We are driving through a range of product innovations and service improvements at pace, as well as targeting new areas of growth and enhancing our offering," Moya Greene, CEO, said.

The first half results come the day after Royal Mail expanded its parcel operations with the acquisition of eCourier, a London-first, same-day delivery service. Royal Mail is expecting growth in same-day delivery as more people order goods online. Amazon recently ramped up its same-day delivery service in London and other parts of the UK.

Royal Mail said full year results would be dependent on the Christmas period, which is typically one its busiest times. "As in previous years, the full year outcome will be dependent on our important Christmas period, for which we have extensive preparations in place," Greene said.