Royal Mail delivers jump in profits to £233m

[TrueBlueTerrier]

http://www.telegraph.co.uk/finance/news ... -233m.html" onclick="window.open(this.href);return false;

Maiden half-year profits at the Royal Mail jump as Vince Cable and Michael Fallon face MPs over the company's valuation

Royal Mail has delivered record results in its first set of numbers as a public company, almost doubling its operating profits for the six months to September.

The newly privatised company has reported pre-tax profits of £1.6bn but stripping out the windfall triggered by new pension accounting, profits have risen from £94m last year to £233m.

The crucial measure of operating profits after transformational costs has jumped to £283m from £144m last year.

Moya Greene, chief executive, has said the first-half performance was “in line with expectations”, delivering a 2pc rise in revenues to £4.5bn.

Revenues from letters have continued to decline, down 4pc, but this has been off set by a 9pc rise in parcels revenues.

The group continues to be supported by GLS, its European business, where revenues grew 6pc and operating profits were up 11pc.

A final dividend of £133m has been proposed.

The results show Ms Greene's transformation is on track, despite the ongoing threat of industrial action.

On Tuesday the group was forced to extend talks with the Communication Workers Union for the third time amid ongoing disagreements over pay and pensions.

However, Royal Mail’s strong performance will also fuel accusations that Royal Mail has been sold on the cheap.

Vince Cable, the Business Secretary, and Michael Fallon, the Business Minister, face the Business Select Committee this morning along with their key adviser William Rucker, the chief executive of Lazard in the UK, and Mark Russell, chief executive of the Shareholder Executive.

Last week the MPs on the Business Select Committee said the Government and taxpayers had been “misled” by bankers who valued Royal Mail at £3.3bn, or 330p a share.

Royal Mail was floated in October at 330p a share which valued it at £3.3bn. The shares, which have suged since listing to as high as 600p, rose 4pc in early trading to 554p.

Yesterday the CWU called for the Business Secretary to cancel the fees still owed to the banks, around £4m.