Royal Mail hoping to deliver shareholders more good news with uptick in marketing mail revenue

 
Josh Mines
UK Government Announces Privatisation Of Royal Mail
The company will report to investors on Thursday (Source: Getty)

Royal Mail will be hoping to report more good news when it announces its full year results on Thursday 17 May, as the postal company could be buoyed by an uptick to marketing mail revenue.

Analysts at Liberum stated that following reports of Royal Mail promoting its unaddressed mail service as a way round upcoming GDPR rules, the company could see an increase in companies switching to more traditional forms of marketing to work around regulations.

Marketing mail accounted for 25 per cent of UK letters revenue for Royal Mail in the year up to March 2017, and 11 per cent of group revenue.

The last time Royal Mail reported, it delivered a six per cent rise in parcel volumes, on top of a 10 per cent rise in volumes and revenues for its European parcel business GLS.

The results will be the first time the company has reported since it was announced that chief executive Moya Greene would be replaced by GLS boss Rico Back in September.

Read more: Royal Mail's revenue is up as parcel volumes deliver strong growth

Ian Whittaker, analyst at Liberum stated:

We believe the operational gearing is high, given the effectively fixed cost base of the universal network.

But Whittaker also raised concerns of a potential downside to a massive increase of marketing mail.

"The risk is that higher volumes would trigger a consumer and political backlash that could lead to tighter regulation," he explained."

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