Royal Mail Group plc (LON:RMG) is posting the results for the half-year to September 27.

UBS expects adjusted operating profit to come in at GBP3mln, against the GBP9mln per consensus forecast, with a loss of GBP143mln in UK parcels, international and letters, with GLS delivering underlying earnings (EBIT) of GBP146mln.

The second half is expected to see group EBIT of GBP81mln, with profits rising to GBP373mln in 2022.

Investors will focus on updates on the discussions with the unions, the magnitude of the profit improvement compared to past guidance and the stickiness of parcel volumes into financial year 2022.

“The big blot on the copybook is the sharp decline in letter volumes. There has also been an under investment in automation which means that Royal Mail is in many ways playing catch up with the competition, even though it’s in the dominant position as the UK’s universal postal provider,” analysts at Hargreaves Lansdown said.

“Adapting with flexibility isn’t Royal Mail’s strong point, but it will need to be much more nimble to keep abreast of its customers changing needs.”

“Coronavirus costs will have significantly eaten into profits, but Royal Mail’s reputation has arguably been boosted during the pandemic with staff praised for going the extra mile to keep the essential service running.”

Kingfisher eyes another lockdown boost

A trading update from B&Q owner Kingfisher PLC (LON:KGF) on Thursday is likely to be eyed for its forecasts as a second UK lockdown heralds a positive demand shift for the DIY products retailer as a return to remote working gives customers more time to pursue home projects.

With the firm’s outlets designated as essential and thus likely to remain open during lockdown, the closure of other stores will likely draw in more customers, as will its large, car accessible warehouses that offer ample space for socially distanced shopping.

Investors will likely be on the lookout for any updates on initial trading over the new lockdown period, while further ahead they will likely look for any plans on how the firm will spend the GBP73mln gained from the sale of its Castorama Russia business in early October.

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