Royal Mail Share Discussion Threads

[lefrene] 09/6/2022 08:29

Isis, Parcel Force for years now have been hiring drivers on a 'self employed' basis.

Mercedes seem to have cornered the rented van side of things, providing a sign written van with the required maintenance package for about £500 a month. The big problem for the driver is that he has to hire a driver if he wants a holiday, or if he gets ill, and will thus lose money, as he also won't get holiday pay or sick pay, it's Victorian working conditions. I think you'll find it's more like 50p a parcel, but will depend on whether it's a city run or a country run. Naturally the city runs are the most wanted due to volumes of parcels and short distances to cover. It's a horrible job, plus all day long you're exposed to the possibility of fines, whilst under huge pressure to get things delivered.

You're right it's such a horrible job that only the hungry with few options available to them do it.

[brut winky] 08/6/2022 18:39

Rot looks to of set in, sounds far-fetched but nearer to £2 than £3. Bottom line squeezed on revised pay rise and longer than expected fuel costs.

[isis] 08/6/2022 16:27

I think many of the Drivers for most of the other Parcel Companies are desperate for unskilled work, have no Unions and are paid about a pound a delivery, most of them immigrants - certainly are in London anyway!
That's why they don't complain!

[lefrene] 08/6/2022 15:47

careful, it's always difficult to get a true overview as we only have our own personal experiences. It's true there are apparently lots of people out there happily spending, and I do wonder from where their income is derived, my guess is not from owning a small business!

I notice the large cars driving around in a normal manner as if the price of fuel is of no account to them, I also notice those driving very carefully because the cost of fuel is a significant obstacle to them. It's so hard to know what's really happening, but one can see prices rising all over the place even week by week on some things.

RMG simply relies upon jacking up their prices and presumably assume that they can keep doing this? With letters perhaps so, as they have the monopoly, but with parcels there's plenty of competition, and yet Parcel Force is the prime earner for RMG. I suspect the share price is reflecting that the market suspects that if the parcels side gets squeezed, it will swiftly undermine the balance sheet.

[careful] 08/6/2022 15:16

A sound understanding lefrene.

We agree that paper cash is trashed regularly.
but the system. like we humans, always survives these setbacks.
It seems to have antibodies and is self correcting.

The only cure for high oil prices is high oil prices etc.

Have you noticed how the majority of people seem to have lots of cash to spend.
Multiple holidays, smart cars, eating out at restaurants, I see no evidence of hardship amongst the majority.

Agreed, thanks to the Beeb ad the media, the bottom 20% are suffering relatively as always.
And the fuss they make when retail sales fall 1%.

But even the bottom 20%, many of ethnic diversity or one parent families, seem to be surviving better than the average family did a few decades ago.

All of this gloom and doom is over hyped.
Things are fine for most, they do not even have to work hard for it anymore.

[lefrene] 08/6/2022 14:41

careful, the world has been kept afloat on an ocean of free money and debt. The free money started on 17-9-19 when the Repo Market seized up. See www.Wallstreetonparade.com That event is reckoned to be something like 4 to 6 times bigger than the Lehman whoopsie, which cost $29.3 trillion.

The credit is being tightened by a miniscule amount and already some wheels are starting to come off. All sorts of interesting things are beginning to happen thanks to the reckless gambling by banks and the failure of the FED to get a grip after 2008.

I don't know how it's going to play out other than I expect it to be very ugly. We have the problem of relying on the people who created this mess, to come up with a route out of it.

TW is so low because the construction industry is totally dependent on credit to sell their product. As that credit shrinks so does the achievable price for your houses, and if you've borrowed lots to buy plots and materials just as the credit gets tight.....................

Cash is king, but oh dear that cash is being eaten by inflation. We'll be very lucky if this gets no worse than the 70's.

As for RMG, I've seen them from the inside across many depots both mail and parcels. The company still has a civil service type mentality where protocols and internal politics trump all else. The culture is not conducive to competitive commerce.

There's no way of knowing where a share price is going, but in my view there are better prospects over the next year or two than going into a highly competitive industry which looks like it's going to be squeezed by people having less disposable income.

[careful] 08/6/2022 14:21

amazing how shares can be Beaton down, always supported by fantasy negative arguments.

The list endless.
Glen the commodity trader/ miner at 80p.
As if the World can live without copper and commodities.

TW. the builder at 3p. Madness.

Recently the oil price was driven down to below zero by traders, even though the World demand was still almost 100 million barrels per day.
Now our 65 Million population will not need RMG to deliver parcels and letters anymore.

Last years turnover was oner £!1bn.
Always money to be made by being contrarian.

[careful] 08/6/2022 14:11

RMG are not the only company with headwinds.
The market is far too negative.
The management and unions cannot be that crazy.

[mrthomas] 08/6/2022 13:28

if it get to 280 may be worth a buy before goes ex div as that a yield of 4.5%. But the problem could be that with hard times ahead it may be forced to reduce the div then the price will fee fall.

Am in two minds but does not go ex till I think 8 July

[wallywoo] 08/6/2022 13:19

This does look great value at this price. What's stopping me is the chart / technical side. Very little support at this price level could easily mean it will drift down to 250ish.

Currently quite a high short percentage too, will add to the chances of the share price falling.


Hope I am wrong for holder's!

[lefrene] 08/6/2022 12:47

We all know there's a slump coming, we just don't know how bad it's going to be.

RMG has a lot of competition on the profitable parcel side of the business, much of that competition is rather more flexible than the RMG civil service way of doing things. Turnover dependent on online purchases look likely to decline, costs are rising, and likely to keep rising, it looks like a knife that hasn't finished falling to me.

[careful] 08/6/2022 12:16

Headwinds include the cost of fuel, potential union disruption, competition and reduced on line spending.

[careful] 08/6/2022 11:50

Topped up with a few more.
Momentum investors see this as a one way ticket because of sentiment.
At todays price below 300p the worst case scenario is baked in with some to spare.

Potentially this could be a strong business.

[tuftymatt] 08/6/2022 07:30

Yeah I got in thinking a slow and steady climb to above 400 was going to happen and instead find myself buying the dips in the low 3's!!
With so much uncertainty out there right now it kind of makes sense but I think this one has a more positive longer term outlook if a bit more short term pain first!!

[careful] 08/6/2022 07:24

Falling again today.
Sub 300p beckons.
Halved yet again , this is a volatile share, it should be boring.

The railwaymen's proposed strike could signal return to the 1970's again.
"Brothers of the World Unite"
The CWU leadership will not wish to be outdone, a matter of pride.

[lord loads of lolly] 06/6/2022 15:32

tuftymatt - Evri hasn't surcharged our business on fuel once this year yet. RM, on the other hand, felt they could levy a 6% surcharge on their (already higher) prices & get away with it. They then announced this would increase to 8% from next month. Result, we've dropped RM completely now. Sure, some may argue their respective service levels aren't comparable. But we've used Evri extensively for over a year now. And in our case, they've been cheaper, as reliable & far better in the rare cases where an insurance claim was needed.

[tuftymatt] 02/6/2022 08:04

Like all carriers during Covid they maxed out as they had so much volume they could charge what they wanted really. Now volume is dropping and wages etc are rising then with fuel going up it's an easy way to put prices up.

All carriers are doing this not just RM and many still charge a Covid surcharge too for International business. This was because of reduced air capacity but it's now back to normal sort of.

I think RM will come good long term and am still a buyer at these levels as it does no harm to my average!!

[exotic] 01/6/2022 22:31

Received an email from Royal Mail today, they're increasing the fuel surcharge by 33.33% on all UK domestic contracts.

As I mentioned before, funny how they never reduced or removed the fuel surcharge when the oil price crashed during Covid!

[pander45] 01/6/2022 22:17

The universal service is a dead weight around the neck of this company. Competitors without it will invest and fly with spare capital and compete aggressively on pricing.

[lefrene] 01/6/2022 16:20

Yes but companies don't pay the sort of charges that the man in the street pays. Those large companies selling over the net will haggle down the prices of the carriers as the economy gets choked by the high cost of essentials. At one point at least one RMG depot at Severn Beach was losing money on it's Amazon business. That was a few years ago, they might have sorted that out, but outfits like Amazon will bully any carrier that they think they can strong arm. We are just at the start of a big slow down, housing will get hit, those that aren't screwed will feel poorer, and thus spend less, saving money to meet those ever increasing utility bills. The price graph of RMG shows that this has been anticipated, will it get worse? Imo it looks like the wider economy will get a lot worse.

[fuji99] 01/6/2022 12:28

People will rather buy online than using their car. Mail and parcel deliveries will always be a normal routine regardless of inflation levels.

[pander45] 01/6/2022 10:41

Inflation up, less consumer spending, fewer online deliveries, profit hit. Simple equation really.