Royal Mail profits up in wake of pension reforms

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Royal Mail has reported pre-tax profits of £1.58bn in the six months ended 29 September. A one-off gain of £1.35bn from pension reforms accounted for most of the increase in profits. However even without the pension reform profits rose £94m from last year.

The recently-privatised mail service said that the state of industrial relations has had an affect with "a slowdown in the rate of business customer acquisition in parcels and switching of some volume to competitors."

Yesterday the Communication Workers Union and Royal Mail agreed to extend the deadline for talks over workers pay and conditions until 3 December.

Chief executive, Moya Greene, said:

Our first half financial performance was in line with our expectations of delivering low single digit revenuegrowth and margin expansion. The combination of increasing EBITDA and moderating investment spend underpins value creation for our shareholders.

As well as rising profits the company reported a revenue increase of two per cent to £4.5bn. Revenues form parcels increased by nine per cent even though volumes have remained stable.