Royal Mail Share Discussion Threads

[tmallet] 28/4/2020 20:54

My sister husband works in the offices in Barnsley. He has seen a leaked document claiming profits during covid are expected to be higher than Christmas 2019

[srpactive] 28/4/2020 16:35

The situation we find ourselves in will be used by all
firms to implement the changes some better some not, but
one thing is for certain the trouble making dead wood will be pruned
if possible.

[srpactive] 28/4/2020 13:46

a

I mention 200p earlier, I do feel we will now consolidate
between 150 - 160p for a period, then test the 200p.

dyor

active

[arbus5000] 28/4/2020 12:32

Finally someone has come to their senses, and citibank has upgraded its share price target for RMG to 210p.

rationale:

Our upgrade is predicated upon two points: 1. A significant & recent acceleration in parcel volumes; and 2. An attractive & nuanced valuation.

Since the lockdown, e-commerce volumes have seen a significant boost both in the UK and in Europe. The evidence is ample. According to BRC data, online non-food sales were up +18.8% for the five weeks ending 4th April. Moreover, Kuehne + Nagel in its Q1’20 results yesterday reported that, “(The) Contract Logistics (division) handled twice as many e-commerce shipments as in the previous quarter.” The relevance of this is that Royal Mail is the leading parcel operator in the UK with more than 50% market share of total parcel volumes. It is also the holder of the majority of the B2C segment both domestically at Royal Mail and abroad at GLS. In other words, Royal Mail is acutely exposed to this accelerating e-commerce theme. We estimate for every 1% annual increase in volume, earnings rise and fall by c.20%. Citi’s Q4’20 forecast for parcel volumes is +9% (vs. consensus of c.+6%) and in FY’21 Citi expects +13% (vs. consensus of c.+8%). While this only leaves Citi’s forecasts in line with consensus for FY’20 (given cost pressures from FY’20), the FY’21 (full-year beneficial effect) leads us to being +400% above consensus operating profit (albeit with small numbers playing a role).

The stock is down c-38% YTD versus peers at c-27%. This comes with good backward-looking reason given obvious pressures in letters and advertising mail at a time of lockdown. But we see value at Royal Mail. As an example and to contextualize the current £1.5bn market cap and £300mn of net debt, the real estate value alone at Royal Mail is c.£830m. Moreover, even on a rudimentary DCF valuation for UKPIL, we achieve a valuation for Royal Mail’s UK operations of c.£1.40 per share versus today’s share price of £1.50 (EV/EBIT 5x). At the very least, this implies the GLS parcel business is receiving almost free optionality in the shares. And, for clarity, our target price of £2.10 implies a GLS value of a modest 4x EV/EBIT.

[lefrene] 28/4/2020 11:44

Or perhaps the 'gig' economy agency people don't happen to know London like the back of their hand? Phone your local distribution office and enquire, it might just be that with so many businesses not currently functioning that the expected mail is not being sent out.

[irenekent] 28/4/2020 11:39

It would be a help if they could deliver the post on time. No post now for 5 days and my neighbours the same. we're in SW London, not the middle of nowhere. Maybe all these agency staff are throwing it in the bin or can't read.

[srpactive] 28/4/2020 11:27

Could it be different for different areas in the UK?

[tubbs64] 28/4/2020 11:20

Thank you Ricky. Very interesting. I look forward to speaking to my line manager later today.

[rick802] 28/4/2020 11:16

https://ibb.co/ZNx5PCN

[rick802] 28/4/2020 11:12

I'm an employee. We received a letter yesterday 'managers update' with details of the furlough scheme available to employees

[tubbs64] 28/4/2020 11:03

Since when did RM change their policy? As of last week RMs policy was if you live with a person in the extremely vunerable class who needs shielding you can have your annual leave or unpaid leave or a combination of the 2..... RM would not be furloughing anybody as confirmed to me by 2 RM managers.

[gazza270667] 28/4/2020 10:54

Don't think so .....

[rick802] 28/4/2020 10:52

Furlough offered to employees with underlying health issues or those that have vulnerable family members.

[tubbs64] 28/4/2020 10:25

Where do you get the information that RM will furlough staff? As far as I am aware they will not be furloughing any staff.

[tubbs64] 28/4/2020 10:20

Yes Gazza, where exactly have you taken your figures from?

[srpactive] 28/4/2020 10:08

This little retrace from 160p is expected after four positive days.

We could consolidate around here, then more higher.

dyor

active

[encarter] 28/4/2020 09:40

Mine are Royal mail figures too.

[gazza270667] 28/4/2020 09:38

Royal mails figures not mine ....but I can believe it with all the agency in our place ...

[encarter] 28/4/2020 09:13

Not sure where you get 31000 from. Sick is running under 15% now. some employees will be going on furlough soon which will save them some cash.

[srpactive] 28/4/2020 09:13

G

Okay, another on the ground insight.

Thank you.

[gazza270667] 28/4/2020 08:54

Yes rm is very busy but what you have to take into account is 31000 staff off on any given day still need paying. Thousands of agency to do there work still need paying. A hell of a lot of money. And i work for rm and I also have shares.

[semper vigilans] 28/4/2020 08:51

Why are the Govt. organising tests via Amazon?

[encarter] 28/4/2020 08:48

They don't care about the union, they have no teeth now that they can't strike. Greetings cards might be another good earner. All those birthdays, wedding anniversary's cards etc that people can't deliver by hand.