Royal Mail has seen such a large surge in customers posting letters and using its services over the last month that bosses have said profits are likely to be higher than previously expected.
The cost of a major restructuring is also expected to come in below expectations, costing around £90 million instead of an original estimate of £140 million.
Royal Mail revenues are now set to be £900 million higher than last year – at around £8.6 billion – and, for the entire group, adjusted operating profits will hit around £700 million, compared with £325 million a year ago, it added.
The company said letter volumes, along with advertising, business and stamped mail, have all performed above expectations.
Parcels have remained in line with expectations, which remain at all-time highs.
Royal Mail has issued a trading update and revised full year expectations.
Read more here: https://t.co/3njU5rCSY7
— Royal Mail News (@royalmailnews) March 10, 2021
A major restructuring announced in June 2020 is nearing completion and is expected to save £15 million this year, with targeted annual savings of £130 million after that.
The update comes just a month after another profit upgrade, when bosses said they would retain around 10,000 of the 33,000 temporary workers who helped Royal Mail out over the festive period.
At its peak, the business carried 11.7 million parcels in one day – almost a third more than during the peak of the first national lockdown last spring.
That was part of the 496 million parcels delivered over the last three months of 2020 – an all-time high.
At the time, Royal Mail said it expected to make an operating profit “well in excess” of £500 million in the financial year ending in March, which has now been revised to £700 million.
