GLS, Royal Mail’s European parcels business, proved to be the group’s star performer in the first half, turning in a profit of £58 million.
In fact, Royal Mail said that were in not for the profits from GLS and Post Office, which made £55m, the group overall would have made a loss.
GLS now covers 42 European states from 642 depots and runs a fleet of 17,100 vehicles.
Royal Mail’s letters business, which is responsible for the universal service, cut its losses from £55m last year to £41m. The group said UK letter volumes fell 6 per cent compared to a year ago, though UK packet volumes rose 5 per cent in tough market conditions.
The group shed more than 5,000 people last year.
Chief executive Moya Greene said: “The necessary measures we implemented earlier in the year – increasing our prices and tight cost control – are a key part of our strategy to return Royal Mail to sustained financial viability. They are beginning to deliver results. But, we have a great deal to do.
“We are half way through our financial year and are operating within a difficult and challenging business environment. The economic downturn is proving to be prolonged and, like many other predominantly UK and European-based companies, our trading conditions are challenging. Our focus therefore remains on returning to sustained financial viability. We will continue to reduce our costs wherever possible without compromising the six–days-a-week service.
“We look forward to working with Ofcom to secure a new regulatory approach as the need to do so is pressing.”