Royal Mail profits fall 30%

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The company said its revenue was up 2.3 per cent to £9,388 million, despite this operating profit was down 30.4 per cent to £162 million.

The company's Royal Mail Letters division recorded a loss of £3 million thanks to a "sharp decline in mail volumes". The Post Office Ltd also made a loss of £34 million, although this was described as an "improvement" by Royal Mail.

Adam Crozier, group chief executive of Royal Mail, said, "The £162million operating profit is a robust financial performance - ahead of expectations - in a year when we faced many difficult challenges. But we secured a landmark agreement on modernisation and pensions and are pressing ahead with the vital investment in and modernisation of Royal Mail Letters to ensure it competes successfully in a market where volumes are falling and competitive pressures are increasing."

Crozier continued, "During the last year we also saw strong revenue growth in both Parcelforce Worldwide and GLS, the Group's UK and European parcels businesses, both of which operate in tight, highly competitive markets. These businesses make an important contribution to Group profitability.

"In the Post Office, we are now more than halfway through implementing the Government's decision to reduce the size of the network by up to 2,500 branches in line with the funding provided. We continue to do all we can to implement the programme as sensitively as possible, and at the same time, we are launching new products and services to earn as much revenue as possible for the Post Office and to keep branches open as income from traditional business declines."