Growth in Royal Mail’s parcels division is disappointing in the context of a booming e-commerce market, according to an industry researcher.

The comment came after its annual results showed increased business performance at Royal Mail was reliant on its growing overseas division.

The operator saw both turnover and volumes for its UK parcels division increase by 3% year-on-year for the year ended 26 March 2017, despite an overall decline in UK turnover.

David Jinks, head of consumer research at Fastlane International said recent figures from the ONS showed this growth wasn't sufficient.

He said: “This is against an e-commerce home delivery market growing by 19.5%. Royal Mail's core UKPIL revenues should not be falling in this climate.”

Turnover fell by 2% to £7.6bn in Royal Mail’s UK division (UKPIL) during the year, with the growth in parcels negated by declining letter volumes. Addressed letters, in particular, fell by 6%.

The loss from UKPIL was “more than offset” by growth in GLS, Royal Mail’s overseas operation, according to the operator.

The division’s turnover grew by 9%, rising from £1.5bn to £2.1bn

Royal Mail CEO Moya Greene said the growth was both organic and through acquisition, as the business had bought a business in Spain and in California. Royal Mail also bought a third business, US-based Postal Express, in April, after the financial year ended.

Greene said: “Its expertise and focus on B2B parcels in multiple geographies - now 41 European countries and seven states in the US - positions it to be a greater force for growth.

“We will continue to invest in careful and focused international expansion by GLS.”

Overall, Royal Mail finished the year on a pre-tax profit increase of 25%, from £267m to £335m.

The business reported a turnover increase of 5% for the year to £9.7bn (2016: £9.2bn).

Greene said: “We have made good progress against all of our strategic priorities. This has been a more challenging period for UK businesses and we have come through it well.”

In its manifesto for the general election, the Labour Party pledged to nationalise Royal Mail should it come into power on June 8.