Royal Mail turns daily loss of £1m into £217m profit

by Daniel Farey-Jones,, Brand Republic 19-Nov-04, 07:00

LONDON - Royal Mail has improved its business mail service levels, but is still falling short of some targets, as it announced a half-year profit of £217m.

In its performance results for July to September, the company met six out of the 11 service targets covering stamped and metered mail, Mailsort, Presstream, PPI and response. In the previous quarter, it failed to meet any of the targets.

It made a £217m profit in the first half of the 2004/05 financial year on turnover of £4.33bn, up from £4.12bn in the same period a year earlier. Its profit margin of 2.9% compares with margins for its competitors, Deutsche Post and TPG, of 8% and 11.6% respectively.

The company is now two-and-a-half years into its three-year renewal plan.

Chairman Allan Leighton said: "It's clear we have made huge progress. A company that was losing well over £1m a day is now making more than £1m a day on its operations and investing in its people and in improving service to customers."

The company is on track to achieve a £400m profit for 2004/05, which will trigger a bonus payment to employees of at least £800 each.

The targets it met this quarter were second-class stamped and metered mail, Mailsort 1, 2 and 3, and Presstream 1 and 2. Performance was improved significantly over the previous quarter in every category, with the exception of second-class response. The next-day first class delivery rate was 92.1%, just shy of the target of 92.5%.

If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the Forum here.