Royal Mail shares advanced after strong performance from its international parcels business buoyed results.
Pre-tax earnings rose to £335m for the fiscal 2017 year, a 25% improvement on the prior period. The results were also boosted by cost-cutting measures.
A good contribution from its international parcels business GLS more than offset a negative impact from declining letter volumes. Overall, group revenue beat expectations, coming in at £9.8bn, a 1% increase on the year.
Nevertheless, the company admitted that its letters business continued to suffer from declining volumes due to the ongoing growth in electronic communications.
Royal Mail also claimed to have suffered from higher fees for delivering international mail due to a weaker pound in the aftermath of last year´s Brexit vote.
The company cited ongoing cost-cutting measures as a key priority. It is targeting a reduction in annualised costs at its UK business of £600m in the 2017-18 fiscal year.