Royal Mail reports rise in profits

27 November 2013 07:18

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Royal Mail reports rise in profits

Royal Mail has reported an increase in half-year profits in its first set of results since its shares were listed on London's stock market.

Pre-tax profits were £1.58bn for the six months to 29 September, although this was boosted by a large one-off gain resulting from a pension reform.

Stripping out these gains, profits were £233m, up from £94m a year earlier.

A 60% stake in Royal Mail was floated on the London Stock Exchange last month.

The shares went on sale at 330p each, but immediately soared in value, leading to accusations that the sale had been underpriced.

In its statement, Royal Mail reported that its revenues had grown by 2% to £4.52bn.

It also said parcels now accounted for 51% of its revenue. Business from letters continued to decline.

"Our first half financial performance was in line with our expectations of delivering low single digit revenue growth and margin expansion," said Royal Mail chief executive Moya Greene.

Business Secretary Vince Cable will face a select committee hearing later over concerns the postal service was undervalued.

Last week, the regulator, Ofcom, told Royal Mail it must improve "important aspects" of its service.

It said Royal Mail had missed key performance targets, and warned that it could be fined if it missed targets in the future.


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