ROYAL Mail has announced a £75 million investment programme for its UK express parcels business, creating 1,000 jobs.
The expansion is part of the group’s strategy to grow its parcels businesses in the UK and overseas.
In the last reported financial year, its parcels businesses accounted for almost half of the group’s revenues, excluding the Post Office, and online retailing is expected to continue increasing.
A new parcel processing centre will be opened in Chorley, Lancashire, in autumn next year. Two further depots will be opened in Cornwall and Hampshire. Nine existing depots expanded or moved to larger sites over the next four years.
A spokeswoman for the group said there were no plans to open new depots or hire extra workers in Scotland, adding that the nearest depot expansion was set to be in Newcastle.
Moya Greene, Royal Mail Group’s chief executive, said: “Our £75m investment is part of Royal Mail Group’s strategy to grow its parcels businesses in the UK and overseas.
“Our strategy is to convert the rise in parcel volumes into profitable growth. That means becoming a much more customer-focused company being run on commercial lines and investing in new, vital technology.
“The investment will enable Royal Mail Group’s express parcels business to meet the rapid growth in demand in the business-to-business, business-to-consumer and consumer-to-consumer markets.”
In April, the government split the Post Office, which runs the branch network, and Royal Mail into two different companies under plans to privatise the Royal Mail. It is thought the mail delivery service could be sold off to investors in late 2013. It is expected to bring in £3-4 billion, making it the biggest privatisation since the sale of the railways in the 1990s.
Earlier this month, Royal Mail unveiled proposals to demand a guarantee of minimum volumes of parcels and letters from postal operators on whose behalf it carries out “last mile” deliveries, in a move which the group said would help improve its finances.
In June the group confirmed it was a “going concern” after the British government took on its £8.9bn pension deficit.
Revenues increased by 4 per cent to £9.5bn in its last financial year, the first time in four years the mail delivery service was cash-positive.
The core postal business, which delivers the six-days-a-week universal service to 29 million addresses, made a profit of £23m on revenues of £7.2bn, up from a loss of £120m last year.
Greene, a Canadian, received pay and other benefits of more than £1m during the year.
Having taken over from Adam Crozier, she is also in line for payments under a long-term incentive plan provided targets are met by 2014.