Royal Mail set to post fall in interim profit

ROYAL Mail is set to unveil falling interim profits this week as the former state-owned giant faces trading and regulatory headwinds in the UK and overseas.

Moya Greene is expected to reveal a profit drop. Photograph: Jane Barlow

City analysts believe chief executive Moya Greene will announce underlying operating profits down 8 per cent at about £260 million in the wake of tough competition in its parcels business in the UK and its European delivery unit, GLS.

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Royal Mail, which floated on the stock market a year ago, said at its first-quarter trading update in July that UK parcel revenues fell 1 per cent as it battles the likes of Dutch-owned TNT and DHL from the US.

UK regulator Ofgem is probing a complaint by TNT’s British business against Royal Mail’s wholesale mail price hikes. It is also poised to pay a fine of about £12m after it reached a settlement with French competition authorities investigating its loss-making parcels operations in that country.