Royal Mail results: the firm is in a “difficult position” as investors wait for updates on cost savings amid job cuts

Royal Mail shares have fallen by a third this year

Royal Mail faces a serious test if it shows whether there will be a boom in the business that came with the pandemic.

The 506-year-old firm won as stores closed in a blockage mode and people drove less. This has caused a huge increase in parcel delivery – but there are fears that this may now diminish after Covid’s restrictions have expired.

In January, the Royal Mail said it expected a profit of the British unit of 430 million pounds for the 12 months to March 31 compared to the previous target of 500 million pounds.

So, on Thursday all eyes are on his results for the whole year. Total profits – including from international business – are expected to grow from £ 664 million to £ 722 million, according to Refinitiv.

The share price has fallen by a third this year, which indicates skepticism about its prospects.

The lack of staff associated with Covid has pushed its costs. But analysts are likely to look at isolated cases.

This week, Royal Mail grabbed headlines when it said it was planning 50 new routes for drones after a series of tests, though that raises questions about how much it spends on new technology.

Huge investments of “much more than £ 400 million” have caused distrust.

Analysts will also be interested in updating the goal of cutting 700 managerial jobs to save £ 40 million a year.

Laura Hoy, a stock analyst at Hargreaves Lansdown, said it was in a “difficult position”. She said: “Now that the accompanying wind has dissipated, much of the transition involves cutting costs, and the biggest price is a large network of employees.”

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