Your cheque's in the post

Angela Kelly, the Scottish postal worker who scooped the record £35.4m lottery draw this week, has revealed her plans for the winnings: getting her nails done, having a trip to Canada and taking her mates out to slightly classier bars. Should the rest of the cash soon start burning a hole in her pocket, her former employer may well have a few suggestions where to offload the cash. After all, Royal Mail has just slipped into the red for the first time in six years.

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Last Updated: 31 Aug 2010

The company's first and second-class and bulk business mail operations incurred an operating loss of £12m last year - that after a profit of £197m in 2005-06. The organisation is clearly struggling in its stated aim of cutting costs and raising productivity. Overall operating costs have in fact gone up £181m to £5.97bn, despite having shed 6,300 jobs - or 6,301 now that Mrs Kelly has jacked in her £21k-a-year position.

The upside for Royal Mail is that the results may strengthen the company's hand in negotiations with the unions, who have been striking over pay and thousands more potential job cuts. For the rest of us though the results may increase pressure for rising prices of stamps, with Postcomm proposing raising second-class postage prices from 24p to 29p from 2010. But if the falling profits at Royal Mail's ailing letters wing are anything to go by - at £194m they were 33% down on the previous year - their problems won't be solved by making it more expensive for the average punter to post a letter. E-mail may lack the style of a neatly-crafted letter, but at least it's free.

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