Royal Mail Group PLC raises profits forecast again as parcels boom continues

() said it expects to more than double its profits this year if the current boom in parcels continues.

In an unscheduled trading update, the postal service said such has been the upsurge in business,  revenues in the year to March 2021 will be £900mln higher than expected at around £8.6bn.

Operating profits would be around £700mln, which compares with £325mln a year ago.

Royal Mail added it had also made much better progress with its restructuring programme than anticipated, with the cost now forecast to come in £50mln lower than expected at £90mln.

The postal service had already raised profit expectations for the year following a bumper Christmas trading period that led to 10,000 temporary staff being kept on to cope with the additional workload.

The number of parcels being sent has rocketed during lockdown with non-essential shops shut and people having to buy things online.

At the peak of business during the run-up to Christmas, Royal Mail said it delivered 11.7mln parcels in one day.

The group added that its overseas business GLS has continued to trade well, while its problem area of letters had proved ‘more robust than anticipated’ with improved volumes in its three areas of business, advertising and stamped mail.

Shares rose 1.4% to 480p.