Parcel hike sees Royal Mail share price soar
Royal Mail has revealed revenues from parcel deliveries overtook letters for the first time as it hiked its sales outlook thanks to a boom in online shopping during the pandemic.
Shares in the group rose as much as 9 per cent as it said full-year revenues at Royal Mail could now be between £380 million to £580 million higher yearon-year.
This marks a sharp reversal on the fall of up to £250 million previously estimated in its scenario-based forecast and would see the division deliver a" better than break-even" result if sales came in at the top of the new range.
It comes as rocketing levels of internet shopping have sent parcel deliveries soaring, with Royal Mail reporting a near-10% jump in revenues to £5.7 billion over its first half.
In its busiest day, Royal Mail processed 2.5 million tracked parcels.
But this was offset by woes in its letters bu siness and soaring costs of the pandemic, which sent Royal Mail group tumbling to a £20 million operating loss for the 26 weeks to September 27.
This compared with earnings of £61 million a year ago and comes after its core Royal Mail postal arm plunged to a £176 million operating loss.
Group pre-tax profits crashed 90.2% to £17 million over the first half.
Interim executive chairman Keith Williams cheered the boost from rocketing demand.
He said: "Whilst the Covid-19 pandemic continues to present challenges for both Royal Mail in the UK and (international parcels business) GLS, the firsthalf performance has been above our initial expectations in many areas."