Further boost for Royal Mail results
Tuesday, March 16, 2021
Royal Mail has filed a further positive update about its full-year results, and will report a huge increase in sales and profits – with letter volumes also performing above expectations.
Last month the group’s share price soared after it said that booming parcels business would help propel operating profits to more than £500m.
Royal Mail has now provided a further trading update, and stated that sales for the full year are likely to be up by more than £900m, while adjusted operating profit will be around £700m.
The group also said that costs associated with its restructuring programme were now expected to be circa £90m, some £50m lower than the original estimate.
Royal Mail stated: “Recent letter volume and revenue trends in Royal Mail have been more robust than anticipated, with advertising, business and stamped mail all performing above our previous expectations.
“Growth in parcels in the UK has remained strong but broadly in line with expectations.”
The group's postmen and postwomen have picked up more than a million parcels since the launch of the Parcel Collect consumer service five months ago. Chief commercial officer Nick Landon said the new service had been “incredibly successful”.
Royal Mail has also just announced that it is poised to start trials of a new Sunday parcel delivery service with a number of major retailers.
“The trial is the first salvo in Royal Mail’s move to tap into the seven-day-a-week delivery market as more and more consumers expect Sunday deliveries as part of their online shopping experience,” the group said.
Parcel volumes have skyrocketed over the past year, with lockdowns resulting in booming e-commerce and home delivery sales. In the three months ending 27 December Royal Mail delivered a record 496m parcels, although the boom also resulted in delays and a backlog of deliveries in some postal areas.
Royal Mail's results for full year 2020/21 will be announced in May.