1p rise edges Royal Mail into profit

ROYAL Mail is about to unveil a profit after five loss-making years.

The company, which is making 30,000 staff redundant, is expected to announce this week that it made £3 million profits in the six months to September on turnover of about £4 billion.

This compares with a £542 million deficit for the same period last year. The turnaround means that Royal Mail is on track for a £100 million profit for the full year.

Much of the improvement is due to a 1p price increase in May for first and second-class stamps.

The latest round of wildcat strikes, which ended last week, is estimated to have cost Royal Mail £40 million - far less than the £100 million predicted by many observers.

The walk-out followed a national ballot in September, which failed to back union calls for a strike.

If Royal Mail makes £100 million it will trigger bonuses for the workforce of 200,000.

The state-owned postal service, led by former Football Association chief executive Adam Crozier, lost £611 million in the year to March 2003.

It faces increased competition from rival carriers and email as well as deregulation of its core bulk mail market.