Royal Mail reveals double profits


Britain Royal Mail

Royal Mail posted another surge in earnings today, but revealed tougher trading at its parcels business and cautioned over the impact of recent strike fears.

In its first set of results as a listed company, the group revealed operating profits nearly doubled to £283 million for the six months to September 29 from £144 million a year earlier, although figures were boosted by £95 million after a VAT credit and lower-than-expected costs of its overhaul programme.

The parcels business saw sales volumes growth grind to a halt as the summer heatwave slowed online purchases, while Royal Mail also said the threat of strike action had since cost it business parcel customers in its key Christmas quarter.

But the group said the recent launch of size-based pricing was offsetting the slowdown in demand and added the spate of energy bill hikes was benefiting its letter business in the second half as providers send out mailings to millions of customers.