Wednesday, July 14, 1999 Published at 11:25 GMT 12:25 UK
Business: The Company File
Post Office profits down
The Post Office faces tougher competition
Competition has hit profits at the Post Office.
Pre-tax profits in the last financial year were down £56m to £608m, despite a 4% increase in the volume of mail deliveries.
Post Office chairman John Roberts said much needed to be done to ensure the organisation could compete effectively in an increasingly tough market.
"We said last year that this year's profits would be lower due to the growing impact of competition," he said.
"This has proved to be the case, but nonetheless, in a year when we announced plans to reduce prices, the Post Office has maintained its record on subsidy-free operation.
"Changes are essential to meet the needs of our customers and prosper in an increasingly competitive market, which is seeing rapid consolation with some 20 acquisitions in Europe in the last year alone."
Earlier this month, the government announced plans to turn the state-owned post office into a public limited company, but said it planned to reduce the organisation's monopoly on mail deliveries.
Post Office chairman Neville Bain said trading conditions were "challenging" and said the service needed to build quickly on the greater commercial freedom promised by the government.
Royal Mail, the delivery arm of the service, made a pre-tax profit of £485m last year, while Parcelforce lost £25m.
Post Office Counters, which runs the nationwide network of post offices, saw revenue grow by 1.6%, with a profit of £32m.
Mr Bain said the past year had been one of the most dramatic and significant in the Post Office's history.
He said: "A decisive first step in the right direction towards real commercial freedom has been taken."
The Post Office saw a profit for the 23rd consecutive year, giving £310m back to the Treasury.
The Post Office said it had contributed nearly £2.5bn to government finances since 1981.
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