MADRID: Royal Mail plc reported that its profit before tax from continuing operations for the half year ended 25 September 2016 declined to 110 million pounds from the prior year’s 116 million pounds. Earnings per share from continuing operations dropped to 8.6 pence from 8.8 pence in the prior year.
But, adjusted profit before tax grew to 252 million pounds from 240 million pounds last year. Revenue for the period grew to 4.583 billion pounds from 4.395 billion pounds in the prior year.
Moya Greene, Chief Executive Officer, commenting on the results, said, “Our performance was broadly in line with our expectations. Group revenue increased by one per cent on an underlying basis, driven by a good performance from GLS, our continental European parcels business. We delivered UK parcel volume and revenue growth including new contract wins. Addressed letter volume decline was within our forecast range. The recent acquisition of ASM in Spain and GSO in California supports GLS’ strategy of targeted and focused geographic expansion.”
The company increased cost avoidance target from 500 million pounds to 600 million pounds of annualised costs cumulative over the three financial years ending 2017-18.
It targets to reduce underlying UKPIL operating costs before transformation by up to one per cent in 2016-17, depending on the absorbable rate of change within organisation. Net cash investment is expected to be no more than 500 million pounds per annum, compared with an average of 615 million poundsover the past three years.
The company noted that its performance for the full year will be dependent on the important Christmas period. Extensive planning, which began in the spring, will help it to manage our busiest time. This includes the recruitment of over 19,000 temporary staff and opening nine temporary parcel sort centres.
The Board has declared a dividend of 7.4 pence per share for the half year ended 25 September 2016.
