Royal Mail shares surge after it posts £900m sales amid pandemic parcel boom
Royal Mail shares surged after the postal service said it expects annual revenues to have jumped by £900million.
In a surprise trading update, the company said the fall in letter volumes had not been as steep as expected while growth in parcels continued to be boosted by the pandemic.
At the same time, the cost of an internal restructuring has fallen from an expected £140million to just £90million, boosting Royal Mail’s profits further.
Sales boost: Royal Mail said the fall in letter volumes had not been as steep as expected while growth in parcels continued to be boosted by the pandemic
The announcement delivered yet more good news to the firm’s army of investors, with shares rising 3.6 per cent, or 17.2p, to 490.6p.
That takes the stock’s gains over the past year to 220 per cent.
Before the pandemic, Royal Mail’s share price had been in the doldrums with its efforts to modernise under former boss Rico Back floundering against union opposition.
But an explosion of online shopping during the coronavirus lockdowns has led to massive growth in parcel deliveries.
During its busiest Christmas ever, Royal Mail shifted a staggering 496m parcels in the final three months of 2020 – an annual increase of more than 110m.
It expects to post a rise in revenues from £7.7billion to £8.6billion for the year to the end of March.