Business Post yesterday reported a 50 percent rise in first half pre-tax profit and said that it would petition the Government to break up the Royal Mail.
Division
After seeing group revenues climb nine percent to £167 million, largely driven by a strong performance by the firm’s UK mail service which saw a 59 percent rise to £60 million, the parcel delivery service is set to make a formal request to the Department for Business for the separation of Royal Mail’s network and sales operation.
Business Posts’ chief executive Guy Buswell said on the decision that ‘the Government must be wondering what to do with Royal Mail. If the network were separated from sales, it would end the questions of what is Royal Mail’s future. We want to help start the debate.”
He revealed that by January he intends to produce a detailed paper with outside consultants on the proposal.
Rivals such as Business Post want the business to be split so that there is no conflict of interest between Royal Mail’s sales operation – their competitor – and its network, which is used for the final stage of delivery.
The news heaps even more pressure on Royal Mail after a difficult period of strikes and the drawing to a close of chairman Allan Leighton’s regime.
Commenting on Business Posts’ results, Mr. Buswell said:
"We have seen a significantly improved Group performance compared to a year ago, with like-for-like revenue growth of 15 percent and profit before tax (before exceptionals) up 50 percent.
Domestic performance
“This has been driven primarily by further very strong growth in UK Mail, good performances in the business-to-business segment, which makes up 80 percent of our parcels business, and in our pallets business,” he continued.
“In UK Mail we continue to win significant new business, including Abbey, HBOS, and Virgin Media.
“We are making good progress in changing and improving the way in which we both market and operate. Central to this is the greater integration of our businesses - particularly mail, parcels and courier – and the introduction of new products and services. The advancements we are making bode well for the future."
November 15, 2007