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Royal Mail in the spotlight, but will Thomas Cook deliver more growth?

As Moya Greene's last set of Royal Mail results are released analysts expect the attention will be on guidance for 2019.
Royal Mail
UBS expects Royal Mail will report £10.14bn of revenue

Royal Mail Group Plc’s (LON:RMG) final results on Thursday will mark the final full year numbers for outgoing chief executive Moya Greene.

It has already been announced that she will retire in September to be replaced by Rico Back, the current CEO of the General Logistics Systems, the group’s major European sUBSidiary.

In a preview of the numbers, Swiss bank UBS forecast Royal Mail reporting revenue £10.148bn, underlying earnings (EBITDA) of £1.042bln, and a dividend per share of 23.9p.

Analysts at the bank said: “Given the recent labour agreement and guidance that FY2018 Operating profit would not be less than £680m, we believe the focus will be on the FY2019 guidance.

“Current consensus is for Operating profit pre-transformation costs of £684m, i.e. flat year-on-year. This will be the last set of results with the current CEO but we do not expect any major strategy changes with the change in management.”

Markets conditions sticky for Thomas Cook

Interim results from FTSE 250-listed holidays operator Thomas Cook Group PLC (LON:TCG) will be watched for a continuation of the revenue growth seen the first quarter, which rose 7% to £1.7bn.

However, the group still cited “challenging” market conditions in that quarterly update and investors will be wary of signs that it is starting to impact on earnings.

The tougher market conditions have already led to plans by Thomas Cook to close 50 of its high street shops, however, the recovery of its German airline Condor could provide some respite despite sector unpredictability.

In a note on 2 May, analysts at Credit Suisse upgraded Thomas Cook shares to ‘outperform’ from ‘neutral’, citing the firm’s partnership with Expedia and the recovery of Condor as key to a 20% potential upside to its 160p target price for the stock.

Thursday May 17:

Finals: Royal Mail Group PLC (LON:RMG), British Land PLC (LON:BLND), Experian PLC (LON:EXPN), National Grid PLC (LON:NG.), Mothercare plc (LON:MTC), 3i Group PLC (LON:III), Sophos Group PLC (LON:SOPH), Wincanton PLC (LON:WIN)

Interims: Thomas Cook PLC (LON:TCG), Countryside Properties PLC (LON:CSP), Euromoney Institutional Investor PLC (LON:ERM), Future PLC (LON:FUTR), Grainger PLC (LON:GRI)

Trading updates: Hill & Smith Holdings PLC (LON:HILS), Just Group PLC (LON:JUST), Regional REIT Limited (LON:RGL)

Ex-dividends: To knock 6.8 points off FTSE 100 index -  HSBC PLC (LON:HSBA), Intertek Group PLC (LON:ITRK), Tesco PLC (LON:TSCO)

Economic data: US weekly jobless claims; US Philly Fed business outlook


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