21st May 2015
Royal Mail has enjoyed a jump in annual profits despite the backdrop of a “challenging” trading environment.
In its results for the year ended 29 March, the postal service group reported that adjusted operating profit before transformation costs rose to £740m, marking a 6% rise.
The group’s parcel volumes increased by 3%, with a better performance in the second half. Addressed letter volumes however declined by 4%.
Net debt at the group was cut from £555m to £275m, mainly due to cash flow generated, offset by dividend payments of £200m.
Commenting on the results Royal Mail chief executive officer Moya Greene said: “We have delivered operating profits in line with our expectations. Our continued focus on efficiency resulted in a better than expected UK cost performance, offsetting lower than anticipated UK parcel revenue. At the same time we have delivered a large number of innovations at pace as we transform our business.
“Our trading environment remains challenging, but we are now poised to step up the pace of change to drive efficiency, growth and innovation, while maintaining a tight focus on costs.”
Following the announcement, by 8:47am, shares in the group had slipped by 2.5p, or 0.5% to 497.4p.