Royal Mail’s pre-tax profits fell by a third last year, as the postal group continues to spend hundreds of millions of pounds on modernising the business.
Pre-tax profits fell from £400 million to £267 million last year as a rise in parcel traffic failed to compensate for falling revenues, which were down 1% overall.
Adjusted operating profit, after investment ploughed into its turnaround, fell by 2% to £551 million. Investors were unimpressed, sending the shares down by 5%.
Royal Mail — which still has a large retail shareholder base after its discounted flotation in 2014 — said it would raise its full-year dividend by 5% to 22.1p
Royal Mail took £180 million of cost out of its business and said that it was on track to reduce annual charges by £500 million for the 2016-17 financial year. Some 3500 people have left the business in the past 12 months.
