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Royal Mail first half operating profit doubles to US$461 million

THE UK's Royal Mail, which floated 60 per cent of its shares on the London Stock Exchange in October, says its operating profit almost doubled in the first half of the year to GBP283 million (US$461 million), compared to GBP144 million in the same period last year, driven by higher revenue at its parcels division.

The operating profit was also boosted by a GBP95 million contribution from a tax credit and lower than expected restructuring costs. Revenue grew two per cent to GBP4.5 billion.

General Logistics Systems, the pan-European parcels business, increased operating profit by 11 per cent to GBP53 million, and revenue jumped six per cent to GBP801 million, driven by growth in all major markets.

Volume also increased six per cent to 193 million items, with 70 per cent accounted for by deliveries in Germany, France and Italy. The company said the threat of strike action by unions to protest privatisation has seen business parcel customers switch to rivals in its key Christmas quarter.

Mail deliveries declined six per cent from a year ago, and while parcel growth has stalled, the unit accounts for 51 per cent of group revenue.