Surge in parcels gives Royal Mail room to manoeuvre | Business

Royal Mail shares struck a two-year high after analysts at Liberum, the City stockbroker, took a less bearish view of the postal giant.

Letter volumes have been falling for some time but the surge in parcel deliveries during the pandemic has helped Royal Mail. Although this hasn’t changed the “structural challenges” facing the group, such as getting a lid on its costs, it should give management more breathing space to come up with long-term fixes, the analyst Gerald Khoo said.

“Stronger parcels revenue growth has given the group more room for manoeuvre and extra time to formulate revised restructuring plans, agree them with the union and then implement them,” he added.

The brokerage upgraded its recommendation to “hold” from “sell”, which helped to send the