GLS, the Royal Mail subsidiary, continued its strong improvement in profitability in the yearending March 31, 2006 with a 37% rise in operating profits to £100 million, up from £73 million in
2004-05. The higher profits were driven by growth volume and revenue growth, along with minoracquisitions in Italy and Poland.The European parcels company’s revenues rose 13.6% to £1,037 million, while volumes grew 14% to293 million parcels. Its operating margin was 9.6%. GLS now generates 11.5% of Royal Mail’s revenueof £9,056.
Describing GLS as “a star performer”, Royal Mail chairman Allan Leighton commented: “It’s anoutstanding example of the achievements which flow from a dedicated focus on customers andefficiency.” Royal Mail said that GLS would maintain its current strategy, invest further in itsnetwork and “continue to play a part in market consolidation”.
Meanwhile, Parcelforce Worldwide, the domestic UK parcels division, completed its financialturnaround of the last few years, with an operating profit of £5 million compared to a loss of £6million the previous year. Its revenue rose 5.4% to £314 million.
Parcelforce increased its market share despite difficult conditions, with improved servicequality, Royal Mail said. Its performance for next-day delivery of time-critical parcels improvedto 96%. Royal Mail said that the parcels division would continue to target higher profits and abetter market share.
