Moya Greene, Chief Executive Officer, commenting on the results, said:

“Our performance was broadly in line with our expectations. Group revenue increased by one per cent on an underlying basis, driven by a good performance from GLS, our continental European parcels business. We delivered UK parcel volume and revenue growth including new contract wins. Addressed letter volume decline was within our forecast range. The recent acquisition of ASM in Spain and GSO in California supports GLS’ strategy of targeted and focused geographic expansion.

“We have increased our cost avoidance target from £500 million to £600 million of annualised costs cumulative over the three financial years ending 2017-18. We are targeting to reduce underlying UKPIL operating costs before transformation by up to one per cent in 2016-17, depending on the absorbable rate of change within our organisation. We are past the peak of investment. Net cash investment is expected to be no more than £500 million per annum, compared with an average of £615 million over the past three years.

“As always, our performance for the full year will be dependent on the important Christmas period. Extensive planning, which began in the spring, will help us to manage our busiest time. This includes the recruitment of over 19,000 temporary staff and opening nine temporary parcel sort centres.”

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Source: Royal Mail Group