Royal mail unveils 17% profits hike

The British postal service Royal Mail increased its profits by 17% last year, triggering payments of more than £400 (€590) to 180,000 postal workers, the company announced today.

The British government said it had agreed a new financing framework giving Royal Mail wider freedoms to use its resources to modernise the service worth more than £1.75bn (€2.6bn).

Royal Mail said today that its pension fund deficit has now grown to £5.6bn (€8.3bn), the company announced.

Adam Crozier, Royal Mail's chief executive, said one of the main challenges now was tackling the pension fund deficit.

“Royal Mail faces a challenging future – the need to modernise, securing the future of the Post Office network, increasing the focus on customers and improving service yet further, generating the cash to ensure the pension fund continues to meet its obligations, and all the time bringing our people with us.

“The key to future success is to ensure that the investment plan is brought to a successful conclusion, with the right incentive plan for our people, who are, as always, the key to our success.”

Profits were up by £53m (€78.3m) on the previous year, despite a decline in the amount of mail delivered, exacerbated by some bulk mail customers switching to lower-priced services of some of Royal Mail’s rivals.

The Royal Mail announced earlier this week that delivery of first and second-class letters were the best on record.