Royal Mail ups guidance on stronger letter volumes

Royal Mail increased its guidance for annual profit after letter volumes were higher than expected.

The FTSE 250 group said it expected full-year adjusted operating profit of about £700m. It had previously said profit would be well over £500m. Revenue is likely to be about £900m higher than in the year before.

Royal Mail said advertising, business and stamped mail had performed better than expected in recent weeks. Parcel growth in the UK stayed strong but was in line with expectations.

"Recent letter volume and revenue trends in Royal Mail have been more robust than anticipated," the company said.

The company also said restructuring costs would be £50m lower than expected with the total bill now set to be about £90m. About £15m of the targeted £130m of savings was achieved in the current year, which ends in March.

Royal Mail shares rose 0.8% to 477.10p at 11:40 GMT.