Royal Mail keeps costs in focus after flat first quarter

But there was better news in Royal Mail’s European delivery network GLS, where volumes grew by 9pc and revenue by 8pc.

Chief executive Moya Greene said: “In the first three months of our financial year we have seen a continuation of the overall market trends we saw last year”.

Royal Mail Plc. (RMG.L) Tuesday said its first-quarter trading was broadly in line with its expectations. The watchdog could impose price caps amid concerns that Royal Mail has no effective competition in letter deliveries.

The FTSE 100 slipped significantly on Friday as Royal Mail shed 3.9 percent after Ofcom published a document which reviewed the company’s efficiency and prompted discussion over the company’s position in the parcel’s sector.

“Our outlook for letter and parcel trends and other guidance remain unchanged from that set out in our Financial Report for the full year ended 29 March 2015 issued on 21 May 2015”, said Greene.

In May, Royal Mail reported a 6 per cent rise in adjusted operating profit to £740million as a squeeze on costs helped offset a lower-thanexpected performance from its parcel business.

In June, Ofcom announced that it planned to launch a fundamental review into how Royal Mail is regulated.

The review also will examine whether any changes to the current postal regulatory framework could be appropriate in order to maintain the universal postal services and will study how to ensure Royal Mail continues to become more efficient given the absence of any significant end-to-end competition for the letters market.

Ofcom’s review is expected to be completed and revised regulations put in place in 2016.