Equities By Region Services UK

Royal Mail share price climbs higher ahead of half-year results

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Shares in Royal Mail Group (LON:RMG) have climbed higher in today’s session, outperforming the broader London market, ahead of the company’s interim update tomorrow. The results will come after the privatised postal operator warned on profits last month.

As of 14:43 GMT, Royal Mail’s share price had added 2.12 percent to 347.20p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.62 percent higher at 7,097.58 points. The group’s shares have lost just under nine percent of their value over the past year, as compared with about a 4.3-percent dip in the Footsie.

Group to post half-year results

Royal Mail is scheduled to update investors on its half-year performance tomorrow and Proactive Investors reports that UBS expects the postal operator to report first-half revenue of £4.9 billion, adjusted earnings (EBIT) of £92 million and an interim dividend per share of 8.0p.

“After the profit warning we expect to hear more about how the company will improve labour productivity (only c+0.1% in H1), as well as developments in the letter and parcel market, particularly around the impact of GDPR on advertising mail volumes,” the analysts pointed out, as quoted by the newswire.

The update will come after the company recently warned that its full-year profit would come in between £500 million and £550 million this year, sending the shares tumbling and threatening the postal operator’s spot in the benchmark FTSE 100 index.

Analyst ratings update

The 17 analysts offering 12-month price targets for Royal Mail for the Financial Times have a median target of 341.00p on the shares, with a high estimate of 500.00p and a low estimate of 250.00p. As of November 10, the consensus forecast amongst 18 polled investment analysts covering the blue-chip group has it that the company will underperform the market.  

As of 14:58 GMT, Wednesday, 14 November, Royal Mail share price is 349.90p.

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