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Royal Mail Share Price Gains on Improving Full-Year Profit Outlook

Practice Stock Trading
Updated: 19 November 2020

Shares of Royal Mail PLC (LON: RMG) soared more than 9% after the company offered more positive guidance on the back of the rising revenue.

The FTSE 250 constituent reported profit before tax of £17 million, compared to £173mln a year ago. An adjusted operating loss of £129 million was reported for six months ending September 27, on the back of the restructuring charges of £147 million.

Revenue soared 9.8% to £5.7 billion with sales expected to come in £380 million to £580 million higher.

“For the first time, parcels revenue at Royal Mail is now larger than letters revenue, representing 60% of total revenue, compared with 47% in the prior period,” said Keith Williams, interim executive chair in a statement.

On a more positive note, Royal Mail said it now expects full-year adjusted operating profits to come “better than break even” if a trend of higher revenues is sustained. This guidance is better than a full-year “material loss” announced in September.

Royal Mail share price gained on better guidance November 2020

Royal Mail share price gained over 9% to trade at 312.9p, a new 2-year high for the stock.

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