Royal Mail reveals drop in profits

Royal Mail posted a drop in half-year profits today after its parcels arm was squeezed by Amazon’s drive to deliver more of its own business.

Parcel volumes were up two per cent in the six months to September 28 but Royal Mail said the division’s revenues fell one per cent in a “highly competitive” marketplace as Amazon’s use of its own network caused rivals to fight harder for business.

Across the group, pre-tax profits were £218m in the six month period, compared with £233m a year earlier.

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Addressed letter volumes fell by three per cent but this was better than expected due to the improvement in economic conditions. Letter revenues increased by one per cent to £2.24bn as a result of price increases and an uplift from elections mail.

In the first half of the year, Royal Mail delivered around 200 million candidate mailings, mainly due to European and local government elections in May.

For the Scottish independence referendum, the company said it delivered over seven million campaign mailings and over five million poll cards.

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