Royal Mail (RMG) has reiterated guidance of adjusted operating profit of £300m-340m for the year ending 31 March. But amid the Covid-19 crisis, the final dividend has been scrapped. It has also warned of a potential reduction to services.
In the past fortnight, the ‘UK parcels, international and letters’ (UKPIL) business has seen much less advertising mail as marketing campaigns are deferred. Business mail has been more resilient but overall downward pressure on letter volumes is expected to persist. Parcel deliveries will likely be hit as companies like Next (NXT) suspend online operations. UKPIL is expected to be loss-making in the year ending 31 March 2021.
With Continental Europe seeing substantial business-to-business (B2B) disruption, profitability in ‘general logistics systems’ is set to be “significantly reduced” in 2021.
