Royal Mail workers benefit from record profits

Royal Mail workers are set to receive bonuses of £1,074, following the announcement of record profits of £537 million for the year 2004-05.

The national mail service reported the record profits today – an increase of 144% on the £220 million profits announced in the last financial year.

Royal Mail chairman Allan Leighton said that postal workers had achieved “a fantastic turnaround” and would now share in “one of the biggest profit shares with employees in UK corporate history”.

Royal Mail is now making more than £2 million a day profit, compared to losing more than £1 million a day in 2002, before the state-owned operator launched its three-year renewal plan.

Royal Mail also announced that the quality of customer service was now hitting the highest levels in a decade. Royal Mail reported that first and second class mail, as well as all Mailsort and Presstream bulk mail services and Standard Parcels had hit or exceeded their target levels since last July and that the results for first class mail and Mailsort and Presstream bulk mail from last October were “the best in a decade”.

The latest figures also showed that the number of lost letters had almost halved, with 99.92% of mail arriving safely. Record mail volumes were now also averaging 84 million letters a day – one million more per day than last year.

However, Mr Leighton said that there was still “a huge amount” to do and that the company still faced a number of “daunting hurdles” to overcome.

This included a £2.5 billion deficit in the Royal Mail’s pension fund and the continuation of losses in the Post Office branches network, which made a loss of £110 million last year.

Royal Mail also said that the rural network of over eight thousand branches was “fundamentally uneconomic” and needed an injection of £3 million a week in order to survive.

Royal Mail also admitted that it needed to make a “several billion pound” investment in order to successfully update automated sorting technology.

Royal Mail Chief Executive Adam Crozier said: “The hurdles we face are formidable but we are determined to change fundamentally what we do and how we do it. Last year’s results, however, were a powerful demonstration of what Royal Mail and its people were capable of achieving. Postmen and women can be justifiably proud of what they have already achieved. They’ve done a fantastic job.”

(KMcA/SP)