23rd Sep 2021 08:19
(Alliance News) -Â Royal Mail PLC on Thursday said the first five months of its financial year saw continued revenue growth across the company, and it expects a sharp jump in interim profit.
Shares in the postal operator were up 1.5% at 489.70 pence in London early Thursday.
In the five months to the end of August, total revenue grew by 8.2% year-on-year and by 18% compared to the same period in 2019.
In the domestic Royal Mail arm, revenue increased by 7.2% year-on-year and by 12% against the same period in 2019. The company said domestic parcel volumes are up by around third compared to pre-Covid levels and that it is maintaining its share of the UK market.
At its GLS international logistics unit, revenue rose 9.3% from the same time last year and by 31% versus the same period in 2019. The FTSE 100 member explained that volume growth slowed during the period as a result of lapping strong volumes seen during the first Covid-19 lockdown in 2020 and the easing of restrictions in a number of countries over the summer.
Looking ahead, Royal Mail said the evolution of the Covid-19 pandemic, including levels of transmission, consumer behaviour and factors such as economic growth and inflation, will influence future performance.
Nonetheless, it expects adjusted operating profit for the six months to the end of September to be around GBP395 million to GBP400 million, with at least GBP230 million from the Royal Mail unit. This compares to profit of just GBP37 million a year ago, and would even exceed the GBP165 million posted for the same period in 2019.
Chair Keith Williams said: "Domestic parcels performance continues to be more robust against ongoing challenges in international. Whilst we continue to expect further normalisation of parcel performance as we unwind from the pandemic and anticipate some upward pressure on costs, both adjusted operating profit and margin are expected to be higher in the second half compared to the first half.
"GLS continues to deliver good volume and revenue growth, both year on year and against 2019. Whilst we are seeing upward pressure on costs in a number of our markets, we maintain our outlook for the full year of low single digit revenue growth and 8% operating margin."
By Lucy Heming;Â [email protected]
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