Author: Archive

UK Royal Mail warned yesterday that its fragile financial recovery would be “materially affected” by the recent unofficial strike action, because of lost business, brand damage and the risk of fines from the regulator.

The mail group made a small pre-tax profit of £3m for the first sixth months of the year, the first time it has been in the black in the first half for five years. Royal Mail made a loss of Pounds 542m in the same period last year. The move into profit was triggered by a 1p rise in the price of stamps in May, which generated £90m.

Royal Mail made a £3 million profit before tax in the first half of this financial year – the first time in five years it has been in the black at the half year.

The underlying performance showed a £55 million profit on the company’s day-to-day operations, compared to a £147 million loss in the same period a year ago, although the trading profit amounted to a return of just 1.3% on the external turnover in the half year of £4,120 million. Royal Mail’s return to profitability comes at exactly the mid-point of the three-year renewal plan. In the first half of last year it made a £542 million pre-tax loss but commenting on the latest figures, the Chairman, Allan Leighton, said

“This is welcome news but Royal Mail has not yet achieved a turnaround. We’ve got our heads above water again but there is still a long way to go before we achieve sustainable profitability.

“Crucially, Royal Mail has still not implemented key operational changes in most of the letters business.”

A 1p rise in basic First and Second Class postage in May has been the prime driver pushing the profit on operations in the letters business to £161 million in the first half of the year.

Post Office Ltd and the Bank of Ireland Group have announced the appointment of a Chief Executive Officer and Board Directors for the joint venture that will launch Post Office branded financial services products through the Post Office branch network, by telephone and the website.

The Chief Executive Officer will be Patrick Waldron, currently the Director of Retail Strategy and Change at the Bank of Ireland. He has filled a number of senior retail banking roles, including Director of Sales and Marketing and Head of Direct Banking, in which he had responsibility for the Group’s market-leading telephone and internet banking services in Ireland. Patrick will take up the position of CEO with immediate effect and will also join the board of the joint venture.