• The Post Office results released this week show that
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Parcelforce has ended its first full year's trading E75m in the red.
But E60m of this was caused by allocating income to Parcelforce which should have been allocated to Royal Mail, according to a Parcelforce spokeswoman. The remaining £15m loss is blamed on the poor performance of the parcels market.
Post Office chairman Sir Bryan Nicholson says: "Parcelforce, in common with its competitors, was severly affected by the economic downtown." Parcelforce has fallen far short of the £9m profit target set by the Department of Trade and Industry which, according to Parcelforce may have underestimated its start-up costs.
Parcelforce also incurred "exceptional costs" for the year of E56m, which included restructuring costs and redundancies among 550 jobs axed.
But Parcelforce says it is now beginning to trade profitably with April and May figures "on target and making money".
Overall the Post Office has made £153m profit, against a target of $127m — up from E116m profit in 1989/90. Parcelforce is the only one of four divisions to have lost money. The others are Group, Royal Mail and Post Office Counters. El Sir Bryan also announced a five-year/E2bn investment pro
gramme for the Post Office "to meet the challenges of the single European market and be ahead of the Citizens charter".
However, this will not add to the E80m allocated to Parcelforce during its first two years.