Royal Mail reports profits rise
22nd November 2011
Royal Mail lost money on delivering letters, despite the record rise in stamp prices in April. Royal Mail has reported rising profits, while stressing that its core business of delivering letters is loss-making.
Pre-tax profits for the six months to 25 September came in at £187m, up from £50m in the same period last year.
Royal Mail made an exceptional gain of £190m from property sales, much of which came from the sale of its Rathbone Place depot in London.
It has cut the number of people it employs in the UK by 5,000 in the past 12 months.
The cuts have taken its workforce to 163,000, which is about 50,000 fewer than were employed 10 years ago.
The past year's reductions have been partly due to the use of new sorting machines.
Royal Mail's statement predicted more "painful changes for our people, as modernisation involves changes to working practices to improve efficiency".
Royal Mail was keen to highlight its operating profit, which includes modernisation costs but excludes other exceptional items, and which came in at £67m, up from £22m in the same period last year.
That figure included an operating loss of £41m from the letters and parcels division, which was an improvement on last year's loss of £55m.
The business is handling 6% fewer letters than at the same time last year and predicts "annual declines for the foreseeable future". Chief executive Moya Greene told BBC News that the 6% decline had been faster than she had originally forecast.
The losses came despite the record increase in stamp prices in April, when a first class stamp went up from 41 pence to 46p.
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