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Royal Mail skyrockets: its business is booming, but competition is fierce

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The actions of Royal mail they are trading this Tuesday with increases of around 20%. Analysts say that thanks to e-commerce the parcel business is booming, but important competition has to be taken into account, so it still has something to worry about going forward.

"One thing is for sure: the parcel business is booming"They state from Markets.com, who believe that the company may still suffer" significant losses "and warn that it cannot be profitable without a substantial commercial change in progress. more job cuts and more automation.

"We seem to have become a nation addicted to online shopping," which is "good news" for Royal Mail, but "there is much to worry about for the future ", express from AJ Bell.

"Royal Mail's 34% growth in parcel volume over the five months to August 30 only shows how the company has benefited from the e-commerce boom. However, you only have to look out the window to see countless vans with other delivery brands that also perform well, confirming the fact that the competition is still fierce for packages, "they add.

The company has updated its revenue forecasts, increasing them to 139 million pounds in the first five months of the year. "That reflects very strong growth," however, "the costs associated with the transition from letters to parcels and coronavirus-related expenses mean that Profitability in the Royal Mail business in the UK continues to decline"They state in Hargreaves Lansdown.

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