UK Royal Mail makes pounds 200m profit and claims that service is better

ROYAL MAIL will this week unveil profits of more than pounds 200m for the first half of the year – and will attempt to allay fears that the profits have been bought at the cost of a deteriorating service.

The results, which put the Royal Mail on track to make profits of more than pounds 400m for the full year and pay a pounds 200m dividend to employees, are an extraordinary turnaround from 2002, when the company was losing pounds 1m a day. Last year, it broke even in the first half.

Mail delivery performance figures for the second quarter will show that Royal Mail is meeting its target of 98.5 per cent of second class letters delivered within three working days. More than 92 per cent of first class letters are delivered the next day, against a target of 92.5 per cent.

The figures will be a boost to the credibility of Adam Crozier, the chief executive of Royal Mail, who took direct responsibility for the operational side of the business earlier this year after it missed all 15 performance targets for last year.

A spokesman for Postwatch, the consumer watchdog for postal services, said: “These are minimum targets. It is good news that they are getting better because service in the first quarter was a disaster. But people are still not happy with the service: they don’t like the move to a single delivery, and we are still hearing from businesses that are losing cheques in the post.”