Royal Mail to post massive rise in profits

ROYAL Mail is tipped to say that its pre-tax profits have sky-rocketed from £17million to more than £380million, when it unveils its interim results on Thursday.

The logistics group has been one of the major winners of the pandemic, with parcel volumes going through the roof in line with the growth of online shopping. Higher parcel volumes, combined with a lack of recurring restructuring and Covid-19 costs, are all believed to have contributed to its profits soaring.

The City expects Royal Mail to say that its revenues for the six months until the end of September grew by 7.4 per cent to £6.1billion.

Royal Mail is expected to announce the return of regular shareholder payouts, with an interim dividend of 7p per share, which will be worth £70million to its investors. The last time it paid a regular dividend was at the end of its 2019/20 financial year.

Royal Mail chairman Keith Williams is expected to say that although parcel volumes are down for the first half compared to the same period last year, the gains it has made are sticking and are settling at much higher levels than pre-pandemic.

Hargreaves Lansdown senior investment and markets analyst Susannah Streeter said: “Although rising Covid cases may have kept e-commerce sales brisk, with some shoppers still reticent about needless trips to the busy stores, volumes are still expected to come in lower.”

She added that Royal Mail’s traditional letters business is likely to post more losses, as people use smartphone apps and social media.