- We now make 2.2 pence in every pound rather than 0.4 pence
- Modest compared to other major postal operators
- Core UK business makes 0.3 pence in every pound
- Must attract external capital
The improved margin[1] we have announced today is a clear indication of the progress we have made and the significant challenges we face.
Our margin increased from 0.4% to 2.2. This means we're making 2.2 pence in every pound, a rise of 1.8 pence on last year.
While this is good news for the business, this is a journey in progress. We are still lagging behind other successful postal operators.
Rate of return
We need to make a good rate of return to be able to pay the bills and invest in the future of the business: in new technology, new products, new businesses and new vehicles. This means the injection of more capital. Our core UK business has broken even after years of losses. But, it made only a modest profit of £23 million on turnover of £7.2 billion – or a third of a penny from every pound.
Chief executive Moya Greene says: ‘Our margin is improving, albeit from a very low base.
‘Our strategies and initiatives are geared towards delivering, in time, not only the 5-10% margin set by our regulator, but also a more commercial margin compared to other successful postal operators.'
[1] Operating profit margin after modernisation costs.