Cost savings help Royal Mail deliver profit rise

The group, controversially privatised in October 2013, said adjusted operating profit before transformation costs was 740 million pounds ($1.15 billion) for the year to March 29, up 6 percent on a year ago and ahead of analyst expectations of 712 million pounds.

Including pensions accounting and other one-off items profit on a reported basis fell 8.7 percent on 2014 to 611 million pounds, on group revenue up 1 percent.

Royal Mail said parcels, worth half of sales and a key focus for growth as the firm modernises its operations to better compete, saw revenue growth held back to 1 percent by tough price competition, with volumes up 3 percent. UK letter sales fell 1 percent for the year with its European operations posting a seven percent revenue rise. ($1 = 0.6440 pounds) (Reporting by Neil Maidment; editing by Kate Holton)