The U.K.'s recently privatized Royal Mail reported a hike in first-half profit on Wednesday, amid continuing concerns that it was sold off too cheaply when it floated in October.
In its first financial results as a listed company, Britain's postal service said cost-cutting and rising parcel revenue helped it almost double first-half operating profit to £283 million ($458 million).
The results came on the same day that U.K. Business Secretary Vince Cable was quizzed by British lawmakers about the privatization of the near 500-year-old business and whether its shares were sold too cheaply. It was the British government's largest privatization in over 20 years.
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Royal Mail shares were priced at 330p when it floated in October – the top of the range - valuing the company at £3.3 billion.
But shares closed at 489p on the first full day of trading, and reached 587p earlier this month, boosting concerns that the company was undervalued at its IPO. On Wednesday shares were 5.7 percent higher at 563p.
The Bow Group think tank - led by former British Prime Minister John Major – last week called for an independent investigation into the valuation, which it described as a "short-sighted firesale."
And the Communication Workers Union (CWU), which represents postal workers, has said the government failed to price Royal Mail correctly, and "lost the taxpayer hundreds of millions of pounds" when it was floated.
But Swiss bank UBS – one of the banks which managed the float – last week placed a sell recommendation on the stock, saying the market was "over-estimating margin upside."