Royal Mail profits surge ahead of planned sell-off

Royal Mail has reported a 60% increase in pre-tax annual profits to £324m, as the government prepares to sell off the 497-year-old postal service in the most ambitious privatisation since British Gas in 1986.

The company, which ministers hope to float on the London Stock Exchange within a year, said its pre-tax profits in the year to the end of March increased to £324m from £201m a year earlier. Sales, which were boosted by a 30% rise in the price of first class stamps to 60p, increased by more than £500m to £9.3bn.

Moya Greene, the chief executive, said: “Our strategy is delivering. The transformation of Royal Mail is well under way.”

Speaking publicly about the privatisation plans for the first time, she said a sale of part of the business would allow Royal Mail to “combine the best of the public and private sectors”.

She promised that the sale would not affect Royal Mail’s universal service obligation to deliver to every address in the UK six days a week for the same price. “We are honoured to provide the universal service to more than 29m addresses across the UK,” she said. “[It] can only be changed by a vote in both houses of parliament.”

Greene pleaded with her staff, who have rebelled against the sell-off plans, to “continue to drive our business forward as we seek to realise our collective objectives”.

“These are times of significant change and we are asking a lot of our people,” she acknowledged.