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Will Royal Mail deliver?

Published: 06:55 17 Nov 2016 GMT

mail,-letters

What will Royal Mail deliver?

Now privatised Royal Mail plc (LON:RMG) delivers interims on Thursday.

In July, the group said it was monitoring the Brexit situation as movements in gross domestic product (GDP) were drivers for volumes of letter and business parcels. No doubt this theme will reappear tomorrow.

Last month, Royal Mail acquired a California-based overnight delivery group for US$90mln (£71mln) as its General Logistics Systems (GLS) division expands into the US and the market will be keen to hear how this is going.

US broker Jefferies expect the firm to report a small rise in operating profits for the period.

Wine merchant Majestic plc (LON:MJW) posts interims on Thursday and it's probably too early to say whether there will be corks popping or not but South African broker Investec is a fan.

It reckons the focus will be on what the firm has learned since September’s profit warning and the group's retail turnaround plan.

In September shares plunged by a quarter after Majestic blamed  weak on-trade business and the failure of a US direct mail campaign for a profit warning.

The group, the largest UK wine retailer, forecast pre-tax earnings before interest in its current financial year to April 2017 to fall short of market expectations of £16.1mln.

"Recent share price weakness is overdone in our view, reflecting the need to reassure that the group’s strategy is back on track and not helped by market concerns on the consumer backdrop," said Investec analyst Alistair Davies in a note last week.

He rates the shares a 'buy' and targets 450p a share -  a along chalk from the current price of 300p.

Davies expects a positive update at the retail business as it moves into the second year of a three year turnaround plan.

Last month, John Colley, the managing director of Majestic Retail, said: "This is a big step in our transformation plan and will help support Christmas trading" as the firm launched a next day delivery of its bottles in time for the festive season.

The offer is for over 1,250 of the group's offerings - including 400 fine wines.

Traders will be looking out for any further update on this.

Significant statements expected

Interims: QinetiQ Group PLC (LON:QQ.), Majestic Wine PLC (LON:WINE), Royal Mail Plc (LON:RMG), Investec PLC (LON:INVP), Creston PLC (LON:CRE), NewRiver Retail Ltd (LON:NRR), Great Eastern Energy Corporation (LON:GEEC), Great Portland Estates PLC (LON:GPOR), Johnson Matthey PLC (LON:JMAT)

Finals: Tracsis PLC (LON:TRCS)

Trading statements: Safestore Holdings PLC (LON:SAFE), Premier Oil PLC (LON:PMO), Ted Baker PLC (LON:TED)

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