By Stuart Iversen
The Royal Mail announced today an increase in its half-year profits. It is their first announcement since they went public and were shared on the London stock market last month.
The report shows the company has made a pre-tax profit of £1.58 billion, for the six months leading up to the 29th September. However, this has been boosted by the companies recent pension reform and its removal drops the profit down to £233 million. A number that is still up on the £94 million from the previous year.
The Royal Mail’s Chief Executive Officer,Moya Greene, said: “Our first-half financial performance was in line with our expectations of delivering low single digit revenue growth and margin expansion. The combination of increasing earnings before interest, taxes, depreciation and amortization (EBITDA) and moderating investment spend underpins value creation for our shareholders.”
The increase follows a 60 percent stake of the company being floated on the London Stock Exchange last month, at a price of 330p per a share. The stock quickly soared in value, leading many to claim it had been undervalued. An issue that will see Business Secretary Vince Cable facing a select committee hearing, where they will discuss whether he and the bank priced the shares too low, shortchanging the British public.
Despite all this, the revenue that is accounted for by letters has continued to fall. With it now accounting for 5 percent less than it did this time last year. However, the revenue coming in for parcels has risen with it now covering 51 percent of all revenue. A rise of 9 percent from last year.
The Head of Equities at Hargreaves Lansdown Stockbrokers, Richard Hunter, said: “The combined UK Parcels and General Logistics Systems (GLS) divisions now account for just over half of group revenue, which provides both opportunities as well as potentially inviting more entrants into a fiercely competitive space.”