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| Royal Mail reports rise in profits | Royal Mail reports rise in profits |
| (35 minutes later) | |
| Royal Mail has reported a 12% rise in annual operating profits to £671m from £598m a year ago in its first set of full-year results since the company floated on the stock market. | |
| Sales rose 2% in the year to £9.46bn, from £9.15bn a year earlier. | Sales rose 2% in the year to £9.46bn, from £9.15bn a year earlier. |
| Royal Mail's parcel deliveries service also overtook its letters business to become the biggest contributor to revenue for the first time. | Royal Mail's parcel deliveries service also overtook its letters business to become the biggest contributor to revenue for the first time. |
| Revenues in the parcel delivery business were up 7%. | Revenues in the parcel delivery business were up 7%. |
| But parcel delivery volumes were flat in the year. Letter delivery volumes fell 4% but this was better than predictions of a 6% fall. | |
| The results are the first full year figures since the controversial privatisation of Royal Mail last October. | |
| The flotation was criticised for selling the company too cheaply, as shares in the firm rocketed as much as 87% above the initial share price of 330p in the first few days after it was listed on the stock market. | |
| Royal Mail chief executive Moya Greene said the company's performance was in line with expectations but she admitted it faces a "couple of headwinds". | |
| She said: "The competitive environment on the parcels side is more intense. We are taking steps to remain the leader in this growing market. | |
| "On the letters side, the headwind is direct delivery and we have strategies in place to counter its adverse financial impact." | |
| Royal Mail also said today it would be calling on communications regulator Ofcom to carry out a full review of direct delivery business services, | |
| These services include the delivery of postal items such as bank cards, bank statements and insurance documents among others and which are open to competition. | |
| Royal Mail said the impact of rival TNT Post UK's publicly-stated plans to move into direct delivery services could reduce its revenue by over £200, in 2017-18. | |
| Under Royal Mail's universal service obligations it is required to deliver post to all parts of the UK. But the postal business is concerned rivals will be undercut it on price and only deliver to the most profitable parts of the country leaving it with the cost burden of delivering to remote areas. |