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Royal Mail results will show if the rise of the Covid pandemic is here to stay

Royal Mail faces a major test as it reveals whether the boom in business that came with the Covid pandemic is here to stay

Royal Mail faces a major test as it reveals whether the boom in business that came with the pandemic is here to stay.

The 506-year-old firm benefited as stores closed and people traveled less. That caused a big spike in parcel deliveries, but there are fears that could now be slowing after Covid restrictions ended.

In January, Royal Mail said it expected profit on its UK arm of £430m for the 12 months to March 31, below the previous target of £500m.

Royal Mail results will show if the rise of the

So all eyes are on the full-year results on Thursday. Total earnings, including in its international business, are expected to rise from £664m to £722m, according to Refinitiv data.

The share price has fallen by a third this year, indicating that there is some skepticism about its prospects.

Covid-related staff absences will have raised your costs. But analysts are likely to look beyond the exceptions.

Royal Mail grabbed headlines this week when it said it was planning 50 new routes for delivery drones after a series of tests, although this raises questions about how much it is spending on new technology. A massive investment of ‘over £400m’ has drawn attention.

Analysts will also be interested in an update on the target to cut the jobs of 700 managers to save £40m a year.

Laura Hoy, a Hargreaves Lansdown equity analyst, said she was in a “difficult position”. She said: “Now that the tailwinds have dissipated, a lot of the transition involves cutting costs, and its biggest cost is its huge network of employees.”

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