LONDON, June 14: Britain's state-run postal service Royal Mail said on Tuesday that its annual profits slumped more than 78 per cent as the embattled company gears up for more job losses and privatisation.

Royal Mail said operating profit slid to £39 million in its year to March 2011 from ¤£180 million the previous fiscal year, as a large drop in the number of letters posted offset a cost-cutting drive.

Chief Executive Moya Greene said Royal Mail's UK Letters & Parcels and International Business lost more than ¤£2 million a week in 2010-11 as the public preferred to keep in touch via email and text messaging.

The average Briton now spends just ¤£18 pounds per year on postage, according to Greene, while mobile phone texts comprise 50 per cent of all personal messaging.

Royal Mail said its daily postbag has plunged by 20 per cent over the past five years.

The organisation carried a peak of 80 million items in 2005-06 but this tumbled to 62 million items in 2010-11 and is now forecast to decline even further, by about five per cent per year.

Greene said the group was facing “very important” change and predicted more mail centre closures and job losses.

“With the decline in our volumes, we are going to be a smaller company in the future than we are today,” she said, but did not reveal how many more staff would face the axe.

“The next two years will be challenging. We need to reduce our costs faster than the decline in revenues from our core letter business.

“The pace of change in our mail centres will continue. We expect that around half of the mail centres could close by 2016-17.” Royal Mail has cut about 65,000 full and part-time positions since 2002, including 5,500 in the past year, while a dozen mail centres have closed and a further 16 are set to shut.As a result, total operating costs fell from 9.0 billion to ¤£8.9 billion over the past year.—AFP