Breakfast Briefing

Parcel deliveries drive Royal Mail profits higher

May 18, 2017

Google - has been hosting its annual developer conference this week and the focus is very much on Artificial Intelligence, which is driving the company to rethink its entire product suite. In this sphere the company is reported to be lagging behind the likes of Facebook and Amazon, but it’s clearly looking to make up lost ground - and with its Android operating system being the first ever to reach 2 billion users, integrating AI into this platform will certainly give Google a head start.

Royal Mail - the UK’s postal service reported results this morning and the seemingly never-ending demand for online shopping saw profits jump 25%. The number of parcels the company is delivering increased by 9%, eclipsing the 6% drop in letters. The company had been concerned that Amazon’s own delivery network was taking advantage of Royal Mail’s obligation to deliver for the same price right across the country, but despite this the numbers seem to be holding up well.

Greggs - provided a sales update this morning and the baker’s £2 breakfast menu appears to be a hit with consumers and food price inflation doesn’t appear to be taking that much of a toll. The company is in the midst of a transition from traditional bakery to the ‘food to go’ market, which is reported to be worth £6 billion a year, so a successful change of direction here has the potential to leave the business well positioned for the future.

British Land - the UK’s second largest property company which owns a selection of office and retail premises has scaled back the amount of development it is willing to undertake before it has secured tenants. Brexit uncertainty and the impact this may have especially on the banking community is driving the more conservative approach, whilst a recent sale of assets also means that the company should remain cash-rich for some time yet. 

Japan - in the 1980s the country was an economic powerhouse, but excessive borrowing brought growth in the country to a standstill over over 20 years. However a concerted effort by politicians for the last five years with monetary stimulus and structural reform - a scheme known as Abenomics - seems to be delivering results. Economic growth for the last 12 months has been reported as 2.2%, well above the 1.2% recorded a year ago.