Stamp of approval

ONCE heavily loss-making, Royal Mail is now enjoying a significant and striking reversal of fortune – a fact underlined by its extraordinary jump in annual profits to £403m just two years after plunging £165m into the red.

Given that the Government has signalled its intention to place the group in the shop window, having set out a framework within which Royal Mail could be sold to a private operator, this healthy financial position should prove useful in attracting bidders.

There is a certain irony, however, in the fact that the state stepped in to take ownership of our failing banks when they racked up losses running into billions of pounds, yet is now intent on selling off a publicly-owned asset just as it is returning a healthy profit.

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Despite its impressive balance sheet – which is said to be a result of growth in its parcels business on the back of the continuing boom in internet shopping – Business Secretary Vince Cable remains adamant that Royal Mail must be sold off if it is to survive in the age of email and social networking.

However, the group has already embarked on a modernisation programme that is one of the largest of its kind in UK industry and the decisive stewardship of chief executive Moya Greene is delivering results.

There is no question that Royal Mail must continue to evolve, but given its remarkable turnaround many will agree with the stance taken by Margaret Thatcher, who always opposed the sale of Royal Mail on the grounds that she was “not prepared to have the Queen’s head privatised”.

If, as appears inevitable, the group is indeed to be sold off then sufficient safeguards must be put in place to ensure that already exorbitant stamp prices do not soar still further, the traditional letters service is not neglected in favour of the more lucrative parcels division and that rural post offices are safeguarded.