Britain's part-privatised postal operator Royal Mail warned Thursday that it faced fierce competition, sending its share price slumping despite rising annual profits. Shares dived more than seven percent, topping the fallers board on the London stock market, but still holding far above the price of last year's controversial flotation. "We are facing a couple of headwinds. The competitive environment on the parcels side is more intense. We are taking steps to remain the leader in this growing market," chief executive Moya Greene said in the earnings statement. "On the letters side, the headwind is direct delivery and we have strategies in place to counter its adverse financial impact." Net profit more than doubled to £1.28 billion ($2.15 billion, 1.58 billion euros) in the financial year to the end of March, Royal Mail said in a results statement. That compared with earnings after tax of £596 million in 2012/2013. However, last year's figure was skewed by an exceptional accounting gain of £1.35 billion, owing to the government agreeing to take on the RoyalMail pension fund's hefty deficit. Pre-tax profit excluding specific items rose by 19 percent to £363 million last year, while revenues grew two percent to £9.46 billion. Britain's coalition government sold off a 60-percent stake in Royal Mail last October in an initial public offering (IPO) as part of its drive to slash the public deficit. The flotation sparked fierce criticism from Britain's public spending watchdog last month, which concluded that the government failed to achieve value for money. Royal Mail's share price plunged Thursday on worries about rising competition, losing 7.41 percent to 532.395 pence in afternoon deals. However, the stock remains more than 60 percent higher than their original IPO price of 330 pence. Following the privatisation, Royal Mail announced plans in March to axe 1,600 jobs under a fresh cost-cutting programme.