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Royal Mail Group financial results for the year ended 25 March 2012
|Group external revenue||9,532||9,156|
Operating profit after
|Free cash inflow/(outflow)||234||(213)|
Profit and cash flow
- Group operating profit after modernisation costs1 increased from £39 million to £211 million.
- UKPIL returned to operating profit after modernisation costs1 of £23 million from a loss of £120 million in 2011.
- No pension deficit payment to the Royal Mail Pension Plan (RMPP) was made during the year (see Balance Sheet). In the previous year, a payment of £292 million was made.
The Group’s overall operating profit margin after modernisation costs1 increased from 0.4 per cent in the prior year to 2.2 per cent. The margin remains low compared to many other major postal operators.
External Revenue and Volumes
- Group external revenue increased four per cent to £9.5 billion after two successive years of decline. Parcels are the single biggest contributor to Group revenues.
- External revenues in UK Parcels, International and Letters (UKPIL), our core UK business, increased from £6.9 billion to £7.2 billion.
- UKPIL’s domestic parcel volumes were up six per cent during the year. Traditional letter volumes declined six per cent.
UKPIL parcels revenue increased 10 per cent to £2.6 billion, driven by strong growth in online retailing. Revenues at GLS, our continental European parcels business, increased by five per cent to £1.6 billion.
- On 1 April 2012, almost all of RMPP’s pension liabilities and pension assets, built up until 31 March 2012, were transferred to HM Government, leaving the RMPP fully funded at that date.
- In light of this post-balance sheet event, Royal Mail Group is a going concern.
Moya Greene, Chief Executive Officer, Royal Mail Group, said: “Royal Mail Group has made significant progress over the last year successfully addressing cash flow, profitability and balance sheet issues. We are cash positive for the first time in four years, our profitability is improving and we no longer have going concern issues.
“We have a clear strategy in place and it is delivering results. We are addressing the structural decline in the traditional letters market by improving efficiency across our operations and adapting our network to accommodate the ever-increasing number of parcels being sent. We recognise, however, that there is much more to be done. Our commitment to executing our strategies is key. Our increased focus on the parcels market and our growing international businesses is helping to build a strong commercial future for the Group.”
Note to editors: View or download Royal Mail Group's Full Year Results Statement 2012
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