Royal Mail warns of threat to

Have your say

THE ROYAL Mail has warned of a threat to the universal postal service because rivals can “cherry-pick” easy-to-serve urban areas.

The recently-privatised group issued the warning as it announced a rise in annual profits after revenues growth from parcel deliveries more than offset a further decline in letter volumes.

In its first set of results since its controversial £3.3bn stock market flotation in October, the company said operating profits after transformation costs were £430m in the year to March 30, against £403m a year earlier. Unions said it was now clear that taxpayers had been “fleeced”.

As the universal service provider, Royal Mail is required to provide access to competitors such as TNT for ‘final mile’ deliveries.

Ofcom is investigating a complaint from TNT over Royal Mail’s decision to change conditions and increase the prices it charges to deliver post collected and pre-sorted by its competitors. The Royal Mail called for “timely regulatory action” to prevent the impact of direct delivery competition from undermining the universal service.

TNT chief executive Nick Wells said Royal Mail should stop “whinging”, insisting his company was trying to create innovation in the postal market.

The Royal Mail said its letters performance was at the better end of expectations, with revenues down two per cent to £4.6bn on a year earlier.

Addressed letter volumes declined by four per cent but the trend improved over the year due to stronger economic conditions and one-off impacts such as energy companies writing to customers about price rises.

Parcel revenues increased by seven per cent but in volume terms the one billion items delivered in the period was flat.

Back to the top of the page