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Royal Mail full-year profit up 25.5%, sales seen declining

Staff Writer | May 18, 2017
Royal Mail reported a 25.5% jump in full-year pre-tax profit as revenues nudged higher, although the group did caution that sales in the UK are likely to fall.
Royal Mail
Royal Mail   The company maintained its outlook
For the 52 weeks to 26 March, pre-tax profit rose to £335m from £267m on revenue of £9.8bn, up from £9.3bn the year before.

In UKPIL, which comprises the company's core UK and international parcels and letter delivery businesses, revenues were down 2% on an underlying basis to £7.7bn, with parcel revenue up 3% but total letter volume down 5%. However, this was more than offset by the performance of parcel delivery service GLS, which saw its revenues rise 9% to £2.1bn.

The company proposed a full-year dividend of 23p per share, up 4% from 2016.

Chief executive officer Moya Greene said: "We have made good progress against all of our strategic priorities.This has been a more challenging period for UK businesses and we have come through it well.

"Our multi-year focus on costs is a key priority. We are on track to avoid around £600m of annualised costs in UKPIL by 2017-18. We are past the peak of investment; we now expect net cash investment of around £450m in 2017-18."

Royal Mail maintained its outlook for addressed letter volume to decline between 4% and 6% a year excluding the impact of political parties' election mailing and said it expects to reach the higher end of its range in 2017-18 if business uncertainty persists.

In addition, it forecasts net cash investment of around £450m in 2017-18 and less than £500m a year going forward.