By Jonathan Davies

Royal Mail has reported a slight increase in full-year profits, despite a "challenging" market.

The postal firm posted an adjustment operating profit of £740 million, up 6% from the previous year. Revenues were largely flat at £9.4bn.

Royal Mail said parcel volumes were up 3% in the UK, thanks to a stronger performance in the second half.

But chief executive Moya Greene said: "Our trading environment remains challenging."

That comes despite the news of Whistl, formerly TNT, suspending its letter service earlier this month. Royal Mail had argued that it was losing out unfairly to firms like Whistl that were allowed to cherry pick their delivery areas, whereas Royal Mail has an obligation to deliver to all parts of the UK for the same cost.