Royal Mail sees half-year profits drop by third

Also warn trade union talks could hit financial performance

Royal Mail’s half-year profits have slipped to a loss and warned that efforts to reach a deal with unions over workers’ pay and pensions could hit its financial performance

The delivery group said pre-tax profits for the six months to 24 September were down 30 per cent to £77m, only kept in the black by its European parcel business GLS.

The FTSE 250 firm said it was a “priority” to reach an agreement with the communications union, with the mediation process likely to run until Christmas or beyond. It added that industrial relations could impact performance in the second half, as it seeks to reach agreement with unions over changes to pensions.

Chief executive Moya Greene said it had been a “good start to the year” with revenues rising by 2 per cent to £4.83bn in the period.

Greene said: “Outside the EU, GLS is also growing through selective acquisitions to capture higher growth markets. UKPIL revenue was broadly unchanged, having declined by 2 per cent in 2016-17. Our investment in our business is paying off. We have won new parcels business; volumes were up 6 per cent. There was a resilient letters performance.”

“As previously announced, we are now in external mediation with the CWU. Our priority is to reach agreement with the CWU to help underpin the sustainability of the business,”Greene added.