Royal Mail Raises 2020 Forecast on Revenue Boost From Letter-Volume Recovery

Royal Mail Plc raised its profit expectations for this year due to a pick-up in letter volumes, a weak spot in the company’s turnaround.

The shares jumped after the company said that recent letter volumes and revenue for the main U.K. business have been “more robust than anticipated.” Growth in the parcels business that has driven the recovery has remained strong, according to a statement Wednesday.

The company expects revenue for the year ending in March to come in more than 900 million pounds ($1.25 billion) higher than the prior year. That’s a stronger increase than it flagged in February. Royal Mail expects to report adjusted operating profit of 700 million pounds, when it issues full-year results on May 20, it said.

Royal Mail, founded under King Henry VIII, has benefited from the pandemic as customers stuck at home turn to online deliveries. In February, it posted its highest sales growth since becoming a public company in 2013. Letters were the only weak spot when the company upped its forecasts earlier this year.

Shares of Royal Mail advanced 1.9% as of 12:03 p.m. in London, after rising as muchg as 3.2%. They have gained 43% this year.