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Is a Royal Mail renaissance too good to be true?

The shares have risen more than threefold over the past year
May 20, 2021
  • A Covid-inspired parcel boom saw the group’s adjusted operating profit jump to £702m in the year to 31 March, up from £325m a year earlier
  • But the exceptional demand for parcel delivery is likely to drop off as the pandemic abates, and Royal Mail still faces some longstanding challenges  

Just over a year ago, both analysts and investors had been getting increasingly pessimistic about Royal Mail (RMG)’s outlook. Here was a business that was tied down by a structurally declining letters market and its ‘universal service obligation’ (USO), and had also been slow to adapt to the rise of online shopping and parcel delivery.

   

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