19th Nov 2015 07:19
LONDON (Alliance News) - Postal operator Royal Mail PLC on Thursday said its pretax profit fell in the first half of its financial year due to an acceleration of its cost-cutting plans in the UK, though revenue also declined and the group reiterated its full-year performance, as in the past, would be heavily dependent on the Christmas period.
The FTSE 100-listed company said its pretax profit for the half year to September 27 fell to GBP116.0 million from GBP167.0 million in the half to September 28, 2014, mainly due to more costs being booked from its restructuring plan in the UK and reflecting a higher number of voluntary redundancies. Nearly 3,000 net employees let the company in the first half. Due to that, Royal Mail's operating margin for the half declined by nearly 110 basis points.
Revenue for the half fell to GBP4.40 billion from GBP4.48 billion, as growth in UK and European parcels revenue offset a decline for the UK letters business. Parcel volumes were up 4.0% in the half, driven by new customer wins, growth in import products and robust volume growth for Parcelforce Worldwide. Letter volumes were down 4.0%, at the low end of the group's forecast decline.
Royal Mail said it will pay an interim dividend of 7.0 pence per share, up from 6.7p a year before.
"We delivered parcel volume and revenue growth in the UK, which continues to be a challenging market. Addressed letter volume decline was at the better end of our forecast range. We are driving through a range of product innovations and service improvements at pace, as well as targeting new areas of growth and enhancing our offering," said Chief Executive Moya Greene.
"As in previous years, the full year outcome will be dependent on our important Christmas period, for which we have extensive preparations in place," Greene added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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