Royal Mail has more than quadrupled its profits over the past year as its shift towards parcel delivery allowed it to cash in on the online shopping boom.
The delivery giant, which ended its exclusivity deal with the state-own Post Office earlier this year, said pre-tax profits jumped a whopping 303 per cent to £726 million in the year to March 2021.
This staggering increase was aided by a 16.6 per cent jump in revenues to £12.6 billion, driven by a 38.7 per cent rise in parcel revenues.
While the number of letters being sent dropped 12.5 per cent during the period, meaning Royal Mail made more money from parcels than letters for the first time in its history.
“The capacity that we felt we needed in 2024 we needed now,” Royal Mail’s chief executive Simon Thompson told the PA News.
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“That’s what the whole market has seen… In terms of parcels, we’re going to increase our investment in automation with parcels as well. That’s not just for efficiency reasons it’s also for later acceptance times, quality and capacity.”
The strong figures enabled Royal Mail to reinstate its dividend, seeing a 10p-per-share payout to shareholders due at the end of the year, rising to 20p-a-share next year.
Looking ahead however, Royal Mail said it they expected the growth in parcel deliveries to slow post-pandemic.
“Commercially we must adapt more quickly to the needs of customers and consumers, and finally deliver the long-promised changes on operational and cost transformation… Without these changes, we cannot be competitive into the future.”