Royal Mail Group back in black, prompting speculation of an IPO ahead

THE Royal Mail Group has increased its half-year profit to GBP144 million (US$228 million) drawn from revenues of GBP4.36 billion supported by the turnaround of loss-making UK parcels, international and letters arm which went from last year's loss of GBP41 million to a GBP99 million gain.

The state-owned postal services has clawed back revenue through growth of online package delivery against a slowing traditional letter sector.

Royal Mail was able to improve the business through "transformation costs" of restructuring to offset the slowing letter volumes by stamp increases creating a revenue increase of two per cent against volume drop of nine per cent.

According to its interim report, preparations are underway for the sale of Royal Mail Group but its chief executive officer Moya Greene said Royal Mail has climbed out of a "very deep hole" and it is down to the British government to decide on whether the timing is right for privatisation, reported London's Daily Telegraph.

Its European Express Parcels business suffered a revenue drop to GBP712 million from last year's GBP778 million. This was attributed to a weaker euro/sterling exchange, said Royal Mail Group.

Much speculation grows on possible investors but with many believing an IPO is more likely than a "trade buyer". FedEx has been mooted as a possible fit for ailing GLS, said the UK's Transport Intelligence.