Royal Mail Share Discussion Threads

[netcurtains] 08/9/2020 19:49

Sort of off topic but only by a little bit (it really is the same topic)

Just on the off chance that someone here would know.
Why has the Royal Mail gone up 25% when Winncanton Transport is NOT going up after it produced these good results back in June 2020?

What is going on?



FY19/20 operational and financial highlights

· Strong year on year revenue growth of 5.2% to £1,201.2m (2019: £1,141.5m) - notable growth in Retail Grocery (+26.0%) and Retail General Merchandise (+5.8%)

· Growth driven by new business in the year, including transportation and vehicle maintenance services contract with Morrisons and contracts with Wickes, Dwell and Sofa Club in our market-leading Home and eFulfilment business

· All major contract renewals successful in year, including Sainsbury's, Waitrose & Partners, Williams Sonoma Inc., Ibstock, Müller Milk, Lucozade Ribena Suntory and adidas

· Underlying profit before tax growth of 7.3% to £52.9m and EPS growth of 6.9% to 35.8p, both driven by revenue growth, strong operational performance and reduced levels of debt

· Robust balance sheet with continued strong cash generation leading to a reduction in net debt to £10.1m (2019: £19.3m)

· Chief Executive's review completed - refocused strategic direction and organisational structure aligned to growth focus: "Great people delivering sustainable supply chain value"

[eithin] 08/9/2020 18:26

AMAZON PRIME ???

[lefrene] 08/9/2020 17:46

And a troll might have an agenda.

There's much room in RMG for improvement and profit, perhaps today's price move reflects somebody having completed their acquisitions at a lower price, and now closed their shorts? RMG would be quite a prize for a proper commercial operator to reform.

[cl0ckw0rk0range] 08/9/2020 17:37

Big volume why I wonder.

[brut winky] 08/9/2020 17:27

Big volume, there may a bit more upside.

[lefrene] 08/9/2020 17:16

clocko, I built up an agency, employing circa 200 drivers without a single road accident, I have a very wide range of experience across many transport companies and worked out of three RMG depots, one of them with circa 100 units. I know the culture can change a bit depot to depot depending on the individual personalities, and indeed one depot (Swindon) improved quite a bit when a young man became a joint transport manager. However that depot largely has a different kind of work compared to others, although round at the mail centre, that was pretty much par for the course.
At Swindon I discovered overlapping journeys, with an artic coming in from NDC and then departing with a handful of yorks to SWRDC, before returning to NDC empty. When running just 15 minutes behind it an artic comes in from PRDC, tips most of the load, and runs to base at SWRDC with a handful of yorks. No genius seemed to have ever noticed this, when one could simply tip the NDC wagon completely at Swindon, thus it could return to NDC, and then put his handful of SWRDC bound yorks onto the wagon running 15 minutes behind it. Saving a good 100 miles and about 3 hours labour. In the real world of commercial trucking these sort of oversights simply don't happen, but in RMG it would seem common. I can only guess it's because each depot gets rewarded by mileage being logged?

[lefrene] 08/9/2020 16:56

careful, there is indeed room for a great deal of improvement on the vehicle operations side, and in changing the culture from box ticking (oh look at me I'm obeying orders), to one of attention to real world details, and focus on reducing wasted mileage. I did note down 12 areas where money could be saved by paying attention to small things, and that's without looking for loads to cover empty runs.

eg, I had more punctures driving RMG trucks than anywhere else, the source of them is obvious and the cure would cost nothing or very little. A puncture delays the vehicle,and necessitates a call out to replace the tyre, I would guess at least £300 as a minimum all in cost. But somehow no one in the hierarchy was the least bit interested.

I presume that this same culture of indifference applies in other areas of their operations.

[careful] 08/9/2020 16:34

It could be argued that all of those inefficiencies that lefrene educates us about make this a buying opportunity.

Great scope for improvement.

[lefrene] 08/9/2020 16:15

I've worked for them, I actually know how the RMG world compares to the real world. I have asked why they deliberately run empty mileage, and was told that the depot benefits from racking up mileage, it's not theirs to question why a truck has been requested to run empty to pick up a load that they know will not exist. Apparently there's a central control with a computer programme! "We just do what it tells us to do".

The value here would be in sacking the entire management pyramid, and leasing the whole thing to Amazon to run. Amazon would make a fortune, although the employees would suffer and the customers get a less tailored service.

It has a still very valuable brand, and lots of very good real estate/facilities, it's the dead hand of government, and the civil service type culture that prevents it operating in a proper commercial manner.

If I had £2.2 billion in my back pocket would I buy it? Only if I had a free hand to run it as it should be run. Perhaps Boris will bite the bullet with this white elephant and free it of the constraints that strangle it?

[geckotheglorious] 08/9/2020 14:47

HerbyRainer
Post 11867
"lefrence, both of your points are factually wrong"

How are they factually wrong? Your evidence is?

I'm genuinely interested.

[thomasearnshaw] 08/9/2020 14:12

This is going to end up bought by Amazon

[cl0ckw0rk0range] 08/9/2020 13:18

Funny that, agenda much?

[herbyrainer] 08/9/2020 13:02

lefrence, both of your points are factually wrong.

[creditcrunchies] 08/9/2020 12:13

so lefrene you're saying dump at this level then?

[lefrene] 08/9/2020 11:16

careful, it's the civil service type culture that causes much of the damage. They will deliberately send out empty trucks to distant depots without first phoning that depot to see if there is a load to be collected. They also make no attempt to find a load for that empty outward leg. It seems that the depot gets some sort of internal 'reward' for sending out the truck, and if they were to find that it was not required and thus the run was not made, then they would not score 'brownie points' for the internal reward. I believe the 'reward' is connected to service miles that a depot logs. It would simply never happen in the real commercial world, any transport clerk knowingly sending a truck out on a 450 mile return journey would be sacked. But in RMG world, that clerk has scored points for his team!

If we get a so called hard brexit and EU trucks are denied entry, then there will be a sudden shortage of haulage capacity since EU trucks do a lot of internal cabotage in the UK. So for a while there should be a boom in haulage rates while the market adjusts.

[careful] 08/9/2020 11:04

A turnover of around £11bn despite letters decline.
If they could just improve efficiency by 2%, and there must be plenty to go at here, this company is way undervalued.

Despite its former state owned trade union culture, there is potential upside here.

[lefrene] 08/9/2020 09:44

Smell of burning shorts! The volume tells the story. It's just a game.

[brut winky] 08/9/2020 09:42

First time these have been on the home page in the biggest gainers for a few years.

[sr2day] 08/9/2020 09:12

must be short closing.8% to close.

[cl0ckw0rk0range] 08/9/2020 08:28

You here again? Do you just post on any RNS that pops up?

[cl0ckw0rk0range] 08/9/2020 08:27

Posting on a 2 year old thread?

[buywell3] 08/9/2020 08:27

Trade Unions