Profits posted at Royal Mail despite slump

ROYAL MAIL’S profits have almost doubled, the postal service said yesterday, as all four sections of the company entered the black for the first time in two decades.

The whole group’s operating profit hit £321m for the year to the end of March, up from £162m last year, and showed its letter delivery arm and its post office unit both returning to profit.

But the state-controlled business will still be part privatised, as business secretary Lord Mandelson insists outside funds are imperative for its survival.

Royal Mail’s massive pension deficit, which has more than doubled over the past year to £6.8bn, is the crux of Mandelson’s privatisation plan.

“Today’s figures show that while the headline profits are in the millions, the pensions deficit is in the billions, and confirms that the Royal Mail remains in a precarious financial position,” he said.

But he faces a backbench rebellion over the controversial move, as around 150 MPs oppose the plan, saying a part-sell off is ill thought through.The positive report from Royal Mail yesterday gave those who oppose the plan ammunition, demonstrating that Royal Mail is still viable.

But the encouraging figures could also spur on the postal company’s potential buyers, which include Dutch company TNT.

The letter delivery unit made £58m, compared with a loss of £3m last year. The Post Office made a profit of £41m, up from £34m of losses.