Royal Mail Group Financial Results – Headline Statements

[fishtank]

Royal Mail Group Financial Results – Headline Statements


· Royal Mail continues to face a very challenging financial situation.


· A damaging regulatory model and falling mail volumes have led to reduced revenue and profits.


· Group profits (after modernisation costs) fell to £39m from £180m the previous year. This is primarily due lower revenues linked to falling mail volumes, although reduced costs have offset some of the decline.


· These figures include the investment being made in modernisation; excluding this investment group-wide profit stood at £246m.


· Group revenue was £9.2bn, down from £9.3bn last year. The profit margin, after modernisation costs fell to 0.4% from 1.9% last year.


· Mail volumes fell 4%.


· The UK letters and parcels business lost £120m, down from £20m profit last year. Again, these figures are after investment in modernisation.


· POL made a £21m profit, down from £33m last year. Revenue in POL is down £60m, driven by fewer government services being provided through the post office.


· Group cash outflow has improved from last year: -£213m compared with -£545m. This is driven by property and business disposals. Reduced supplier costs have also helped improve cashflow.


· There are now 5,500 fewer people employed across the Royal Mail Group Businesses (this includes approximately 1,500 fewer managers) than last year. There has been a 2.4% reduction in the total number of hours worked across the business.


· The ‘accounting’ pension deficit fell to £4.5bn from £8bn last year. This was driven by increased asset values due to improved market conditions. The government’s move to CPI from RPI for the indexing and revaluation of pensions has also reduced liabilities and therefore the deficit.


· A total of £771m was paid into the pension fund, of which £299m was in pension deficit recovery payments.