Royal Mail share price: Group to increase stamp prices from next month

on Feb 28, 2017
Updated: Oct 21, 2019
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Royal Mail Group (LON:RMG) is increasing its first class and second class stamp prices, the privatised postal operator has said. The move, which will come into force next month, is against the background of falling letter volumes.

Royal Mail’s share price has been steady in today’s session, having added 0.56 percent to 411.50p as of 10:00 GMT. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.06 percent higher at 7,257.53 points. The group’s shares have lost some 10 percent of their value over the past year, extending the fall to just under 11 percent in the year-to-date.

Royal Mail announced on Friday that it was increasing its stamp prices from March 27, to “help ensure the sustainability of the universal postal service”. A first class stamp will go up by 1p to 65p and a second class stamp by 1p to 56p. In addition, the price of a large letter first class stamp will rise by 2p to 98p, while a large letter second class stamp cost 76p, or 1p more. The privatised postal operator, however, insisted that its prices were still “among the best value in Europe” when compared to rivals.

The news comes after Royal Mail posted flat revenue for the first nine months of its financial year in January, disclosing that lower letter volumes had offset a gain in parcels.
The 14 analysts offering 12-month price targets for Royal Mail for the Financial Times have a median target of 472.00p, with a high estimate of 590.00p and a low estimate of 360.00p. As of February 25, the consensus forecast amongst 17 polled investment analysts covering the group advises investors to hold their position in the company.
As of 10:25 GMT, Tuesday, 28 February, Royal Mail share price is 412.80p.

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