Royal Mail benefits from energy firms' direct mail surge as profits double

The Royal Mail reveals it has made a "good start" to the second half of its fiscal year on the back of a surge of direct marketing from energy companies, as profits for the first half of its financial year more than doubled.

Royal Mail: more than doubles its profits in the first half of the financial year
Royal Mail: more than doubles its profits in the first half of the financial year

Profits before taxation excluding specific items rose year on year to £233m from £94m for the six months ending 29 September, according to the first results filed by Royal Mail since floating on the stock market.

The performance was driven by cost cutting and a 9% increase in parcel revenue, but the company did see a decline in its direct marketing business as brands turn to online marketing.

The marketing mail business recorded a 3% drop in revenue year on year to £545m for the six months, although the same period in the previous year was boosted by additional marketing activity in the build-up to London 2012 and the Diamond Jubilee.

Royal Mail said it was continuing to see declines in business mail volumes as businesses, particularly in the financial services industry, move customer communications online.

However, its letters business has seen a strong start to the second half of the year as energy companies increase their mailings.

All the big six energy firms have now raised their energy prices and are battling to reassure customers the price hikes are necessary as they come under attack from Labour leader Ed Miliband.

Royal Mail has warned it has seen "some customer reaction" over the threat of strike action from its staff who object to Royal Mail being privatised.

Businesses have been turning to competitors for parcel delivery in anticipation of strike action as Royal Mail enters its busiest period of the year. 

Subscribe to Campaign from just £57 per quarter

Includes the weekly magazine and quarterly Campaign IQ, plus unrestricted online access.

SUBSCRIBE

Looking for a new job?

Get the latest creative jobs in advertising, media, marketing and digital delivered directly to your inbox each day.

Create an Alert Now
Omnicom shuts M2M in UK after account losses
Share

1 Omnicom shuts M2M in UK after account losses

Omnicom has shut its media agency M2M in the UK following a string of account losses and Alistair MacCullum, the chief executive of M2M, is stepping down.

Brands that forge an emotional tie are best protected from copycats
Shares0
Share

1 Brands that forge an emotional tie are best protected from copycats

Forging an emotional tie with consumers is one of the strongest ways to protect your brand. Products can be copycatted, but the distinctive identity of a true brand can never be replicated argues Nir Wegrzyn, CEO of BrandOpus.

Just published