With Back’s departure, interim CEO Keith Williams is left in a difficult situation, the mail carrier’s shares are currently at around half of their listing price when it was floated in 2013 after being returned from state ownership, the dividend has been cut and it has delivered a string of profit warnings. In short, there may be little for investors to look forward to.
A trading update in May did little to alleviate the gloom as the company reported a 33% fall in letter volumes and a £40mln increase in costs in the five weeks to May 3, 2020, although parcel volumes did jump 31% as more people ordered goods online during the coronavirus lockdown.
With this in mind, shareholders are likely to want news on the company’s turnaround plans, as well as how it aims to respond to the effects of coronavirus and social distancing measures on its operations.
There could also be some positive news as lockdown measures begin to be eased, with the company’s international parcels business GLS possibly seeing some volatility subside as nations begin to relax border controls.
Looming over all these issues is the threat of industrial action, with members of the Union of Communication Workers (UCW) having voted overwhelmingly to strike in March, although this was delayed as a result of the pandemic.
Auto Trader restarts the engines
Also on Thursday Auto Trader PLC (LON) will release its full-year results, the first with new chief executive Nathan Coe at the wheel after he stepped up from chief financial officer in March when Trevor Mather retired.
The FTSE 100-listed group offered free advertising packages to retailers in April and May and a 25% discount in June, saying last month that its marketplace data and consumer research suggested “healthy levels of demand” for second-hand cars.
This week, research by the AA indicated online searches for second-hand cars have rebounded higher than levels in the weeks preceding the coronavirus lockdown.
Price, stock levels and new product offers are the three key drivers of Auto Trader’s revenues and will be analysed closely for the year just ended and the year just begun, according to Russ Mould at AJ Bell.
Analysts are on average forecasting a 5% increase in sales to £372mln, with profit before tax rising 5% to £242mln.
UBS forecasts a large negative impact on stock and for the weakness in Manufacturing and Agency revenue seen in the first half to “accelerate to the downside”, but that Coe will deliver positive commentary on trading in the new financial year.
Thursday June 25:
Economic data: US GDP, US weekly jobless claims