As one of the most consistently high-ranked shares on Stockopedia, the Royal Mail turned out to be one of the top performers after the onset of the Covid-19 pandemic. As parcel demand boomed from people stuck at home, so did the company’s share price, which more than quadrupled from the March 2020 lows to the June 2021 highs.


FY2021 was an exceptional year for the company, and generating £620 million in net profits blew away even the company’s own internal expectations. However, the Royal Mail’s share price has taken a breather after the company cited cost pressures in a number of markets. The share price has drifted lower as a result and is currently almost 30% below its 52 week high.

Despite the increase in costs, the company has still guided for a strong H2, with revenue and profit figures expected to be higher than H1 (operating profit estimated at £395 to £400 million in H1).

In an industry facing ever-evolving structural changes, as letter volumes decline and parcel volumes soar, will the Royal Mail continue to deliver?


What are the company's principal business activities, how does it generate its revenues?

The company’s business activities are split in two: Royal Mail and General Logistics Systems (GLS). Through the Royal Mail, the company collects, sorts and delivers letters and parcels to over 31 million addresses across the UK. It is also the UK’s sole designated Universal Service Provider.

Delivering over 840 million parcels last year, GLS is one of the largest ground-based deferred parcel operators in Europe. Covering over 40 countries, GLS has rapidly expanded its global presence in recent years, particularly in North America.

The Royal Mail accounted for 68% of group revenues last year, with GLS making up the remaining 32%.


Parcels now represent 72% of group revenue, which was up from 63% in the prior year. This has helped to offset the decline in Royal Mail letter revenues.

Size, Sector & Exchange

At the current share price of 430p, the Royal Mail is worth just over £4.3 billion, giving it large cap status. The company operates in the Industrials sector, as part of the Freight & Logistics Services industry group. The Royal Mail is currently a constituent of the FTSE 100.

Business strategy

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