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Royal mail rallies after results

Royal Mail is trading at 561p, up 5.2% after announcing a strong set of figures

The recently privatised mail service reported a pre-tax profit of £233 million for the six months leading up to the end of September; this compares with pre-tax profits of £94 million for the same period last year.

The group announced that parcel sales now account for over half of its turnover, as revenue has grown on like-for-like basis by 2% over the past six months.

Royal Mail has stated that it still intends to pay out a final dividend of £133 million. Since interest rates are so low any company paying a dividend will be attractive to institutional investors as an income stream is often sought after.

Before flotation, some accused the government of undervaluing the company, while others suggested it was because they wanted to avoid a Facebook-style flop post-flotation. Royal Mail was listed on the London Stock Exchange at a flotation price of 330p but is now trading above the 560p level, an increase of nearly 72%.

Royal Mail chart

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