Mail posts loss as letters a write-off

BUT PANDEMIC PARCELS BOOST REVENUE

ROYAL Mail has tumbled into a £20million half-year loss as the pandemic accelerated a decline in sending letters.

The group’s operating losses for the 26 weeks to September 27 compare with earnings of £61million a year ago. But it has hiked its sales outlook amid a boom in parcel deliveries as online shopping has surged during the crisis.

It said full-year revenues at Royal Mail are now expected to be between £380-£580million higher year-on-year, which could see the division deliver a “better than break-even” result.

The firm’s core Royal Mail postal arm plunged to a £176million operating loss.

Keith William, interim executive chair of Royal Mail, said: “The growth in online shopping and parcels during the pandemic, combinedmbined with our increased focus on delivering mmore of what customers want, hhas led to revenue growth of nnearly 10 per cent for the group iin the first half, with Royal Mail revenuer up nearly five per cent. “For the first time, parcels revenue at Royal Mail is larger than letters’, representing 60 per cent of the total, compared with 47 per cent in the prior period.”

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said with the demand for letters plummeting, there is a risk that the red postbox could go the same way as the iconic telephone box, “revered for its history and not its usefulness”.

She said: “Adapting with flexibility is not Royal Mail’s strongest point and it will need to be much more nimble to keep abreast of its customers’ changing needs and stayy in with a chance of keeping up

with the compecompetition.”