Royal Mail hikes profit forecasts as it delivers letter boost
Royal Mail today lifted its profit forecasts after it delivered better-than-expected letter volumes and revenue since the start of the year.
The postal company delivered a record number of parcels in the run-up to Christmas as the pandemic fuelled an online shopping boom, though letter volumes fell.
But in a trading update this morning the group said letter volumes had been “more robust than anticipated” over the last month, with advertising, business and stamped mail all exceeding expectations.
As a result, Royal Mail said it expected adjusted operating profit of £700m, up from previous forecasts of £500m. It also lifted its revenue expectations to more than £900m higher year on year.
Shares pushed roughly 1.7 per cent higher in morning trading.
Royal Mail also said the costs linked to its management restructuring programme had dropped to £90m, down from original estimates of £140m.
The company said it will hit its targets of £130m in annual savings, with around £15m to be booked in the current financial year.
Royal Mail reported the busiest period in its history in the quarter before Christmas, distributing 11.7m parcels in its busiest 24 hours.
Covid restrictions prompted a surge in demand, leading to Royal Mail retaining around 10,000 of the 33,000 flexible workers employed for the festive season.