Royal Mail surpasses goals as it posts £200m profit

LONDON - Royal Mail is ahead of its targets and is set to report a £200m profit this year despite the £40m cost of crippling strikes.

According to reports chief executive Adam Crozier and chairman Allan Leighton will present the profit as proof that their ambitious three-year turnaround plan is working.

Royal Mail is currently in the second year of the turnaround, which has as its goal profits of at least £400m by the end of the next financial year.

To achieve that goal it is being estimated that Royal Mail still needs to cut another 12,000 jobs as part of its £1.3bn cost-cutting plan. The 12,000 job losses are part of the overall target of 30,000, which were approved last year by the government.

The Observer newspaper reported at the weekend that the figures will be welcomed by trade unions despite the fact that Leighton described last year's strikes over pay as "commercial suicide".

In the year to March 31 2003 Royal Mail halved its losses to £611m from £1.1bn previously. In November Royal Mail revealed it had made a £3m profit in the first half of this financial year marking the first time in five years it had been in the black so early in the period.

News of the profit follows the recent deal signed with rival UK Mail, a subsidiary of Business Post, whereby Royal Mail charges the firm 13p per letter to deliver its post. The deal was the first deal of its kind in the UK to carry post over the so-called "final mile".

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