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Royal Mail


M S E Refugee
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  • 3 weeks later...
M S E Refugee

Not sure if Mail volumes are sustainable with the lockdown but I am surprised how busy we are considering how many firms are closed.

 

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Democorruptcy
On 14/03/2020 at 11:03, M S E Refugee said:

How low can they go?

I am very tempted if they go below a quid.

A 76% drop in 2 years isn't enough to tempt you into the water? I'd hate to have to barter with you for something :)

RMG should be pressing OFCOM hard to try drop the USO by a day, using the virus as the reason.

 

RMG.jpg

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M S E Refugee
2 minutes ago, Democorruptcy said:

A 76% drop in 2 years isn't enough to tempt you into the water? I'd hate to have to barter with you for something :)

RMG should be pressing OFCOM hard to try drop the USO by a day, using the virus as the reason.

 

RMG.jpg

I buy them through work each month through salary sacrifice plus I receive a couple of free shares a month so my next lot will cost me less than a quid.

It depends how long the management takes to implement cost savings which are considerable, also they have used the pandemic to cancel the dividend.

Royal Mail has huge potential but the one thing that I can get my head around is that Royal Mail and Parcelforce haven't merged as they would need fewer depots,vehicles and staff.

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It seems rather odd to me that Rico hasn't asked for government financial help which seems to be available to everyone else from Billionaire Branson and Billionaire Levy and Billionaire Green, right down to self employed facebook cupcake makers and even benefits claimants.... these are all getting help so they don't have to ''bear the brunt'' of additional expenditure as a result of CV19 and yet, even though the govt deemed RM to be a ''key industry'', we're not able to receive any financial help?

 

Can't help thinking that Rico is quite happy to see the business currently losing money and the SP tanking so he has justification for pushing through the business transformation changes he wants to make.

At the moment he just seems to be sitting on his hands and not taking advantage of the situation, either by requesting govt. financial help or reducing the number of delivery days.

 

Even the union has requested a reduction in the number of delivery days... they perhaps ought to be careful what they wish for!

 

I finally noticed junk mail volumes dropping off yesterday, but I can only see pkts increasing for the foreseeable future with everyone stuck at home, and hopefully longer term as well.

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M S E Refugee
12 minutes ago, Royston said:

It seems rather odd to me that Rico hasn't asked for government financial help which seems to be available to everyone else from Billionaire Branson and Billionaire Levy and Billionaire Green, right down to self employed facebook cupcake makers and even benefits claimants.... these are all getting help so they don't have to ''bear the brunt'' of additional expenditure as a result of CV19 and yet, even though the govt deemed RM to be a ''key industry'', we're not able to receive any financial help?

 

Can't help thinking that Rico is quite happy to see the business currently losing money and the SP tanking so he has justification for pushing through the business transformation changes he wants to make.

At the moment he just seems to be sitting on his hands and not taking advantage of the situation, either by requesting govt. financial help or reducing the number of delivery days.

 

Even the union has requested a reduction in the number of delivery days... they perhaps ought to be careful what they wish for!

 

I finally noticed junk mail volumes dropping off yesterday, but I can only see pkts increasing for the foreseeable future with everyone stuck at home, and hopefully longer term as well.

I thought the Mail volumes would have dropped off a cliff but we have been quite busy this week, we will be dealing with the NHS test kits next week.

 

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4 hours ago, M S E Refugee said:

we will be dealing with the NHS test kits next week

This is the key point for me - in a crisis you come to realise that RM is a strategic infrastructure asset for the country, not just a luxury service for delivering eBay orders.

I'm definitely eyeing up opening a position at these prices.

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7 hours ago, M S E Refugee said:

I thought the Mail volumes would have dropped off a cliff but we have been quite busy this week, we will be dealing with the NHS test kits next week.

 

And BoJo's letter to every household next week... not for me though, my week off!

 

I'm currently still in the employee SIP,  tempted to also get another 1000 or so next week.

 

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Topped up my RMG today, increased my holding by about 10%

Probably wishful thinking, but with all the talk of how valuable the delivery sector has proved to be during this crisis it would be nice to think that RM's ''gig economy'' rivals will finally be clamped down on and have to give improved T&C's and better pay to their workforce, this increased costs meaning they become less competitive, so potentially more business for RM.

Plus a potential general increase in online shopping in the future from all these people who never previously used it much prior to finding themselves being stuck at home with no other option.

 

600p here we come!!:D

 

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3 hours ago, Royston said:

Topped up my RMG today, increased my holding by about 10%

Probably wishful thinking, but with all the talk of how valuable the delivery sector has proved to be during this crisis it would be nice to think that RM's ''gig economy'' rivals will finally be clamped down on and have to give improved T&C's and better pay to their workforce, this increased costs meaning they become less competitive, so potentially more business for RM.

Plus a potential general increase in online shopping in the future from all these people who never previously used it much prior to finding themselves being stuck at home with no other option.

 

600p here we come!!:D

 

Your analysis seems sound, I haven't looked at them for a while - nearly 20% divi!

(just seen it's suspended)

Quote

Royal Mail warned on Friday that its parcels, international and letters business (UKPIL) was set to make a loss while profitability at its European business, GLS, will be "significantly reduced" due to the Covid-19 outbreak.
The company still expects to report FY2019-20 group adjusted operating profit before IFRS 16 of ?300m to ?340m. However, it said that in light of "significant uncertainty" going forward, the UKPIL business is expected to be "materially" loss-making in FY2020-21 and GLS profitability significantly reduced.

To preserve cash, it plans not to propose a final dividend. In addition, the planned transformation of the UKPIL business is now expected to take even longer to achieve, it said.

Royal Mail also suspended guidance for 2020-21 and beyond.

The company said that in the last two weeks, advertising mail in particular has been significantly impacted by the pandemic, as marketing campaigns have been delayed or cancelled, especially in the travel sector. Business mail volumes have been resilient to date and broadly in line with previous expectations, it said, supported by recent customer mailings.

"We anticipate that recent restrictions on individuals and businesses will have a negative impact on unsorted and stamped mail, although we are unable to quantify it at this stage," it said. "Whilst it is difficult to accurately predict how letter volumes will evolve over the coming weeks we do expect downward pressure to continue."

Chief executive officer Rico Back said: "We are putting the health and wellbeing of colleagues and customers first. At the same time, we are delivering the parcels and letters that are a lifeline for those who cannot leave their homes.

"We are entering a period of significant uncertainty in a good financial position. We have a strong balance sheet. We have substantial levels of liquidity and low levels of debt. We are taking immediate steps to further reduce our costs and protect our cash flow."

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: "Royal Mail is in a better position than some companies, in that its core letters and parcels business does at least continue to operate. The increase in online shopping is even providing a boost to some parts of the business. However, the significant falls in overall postal volumes both in the UK and internationally are expected to decimate profits this year and the group is nursing cash flow through the lean times, with the result that the full year dividend has been scrapped.

"The all-important question now for the group is how long the current lockdowns last, and unfortunately there's no ready answer to that. Royal Mail reckons it has the liquidity to weather disruption for some months, but if conditions haven't improved by the end of the summer things become increasingly challenging."

 

Edited by Loki
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35 minutes ago, Royston said:

It appears that OFCOM are willing to allow a temporary suspension of the USO, what's the betting it becomes permanent?

Taking the USO down from 6 to 5 days would see a reduction of around 20,000 from the workforce.

https://www.thetimes.co.uk/article/royal-mail-given-nod-to-cut-six-day-service-ltnztm7ng

At the moment we are seeing postal deliveries twice a week.

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1 hour ago, eek said:

At the moment we are seeing postal deliveries twice a week.

Some parts of the country have now got 20% of the RM workforce off sick so not surprising.

I just think as the USO was up for review later on this year anyway there's a fair chance if it is reduced now it will never be returned to 6 days.

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M S E Refugee
3 hours ago, Royston said:

Some parts of the country have now got 20% of the RM workforce off sick so not surprising.

I just think as the USO was up for review later on this year anyway there's a fair chance if it is reduced now it will never be returned to 6 days.

I think that parcels ought to be delivered 7 days a week and late afternoons during the week, I have never been able to fathom why they insist on delivering parcels when most people are at work. 

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8 hours ago, M S E Refugee said:

I think that parcels ought to be delivered 7 days a week and late afternoons during the week, I have never been able to fathom why they insist on delivering parcels when most people are at work. 

Agreed, I'm sure that must be part of Rico's business transformation plans, hence the LAT duties that are already cropping up... parcels delivered 7 days in to the evenings and letters down to hopefully 4 days at the most.

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  • 4 weeks later...
  • 2 weeks later...

With immediate effect is rather dramatic, I wonder if there's a possible takeover in the offing but whoever it is had made it clear they want Rico out of the way before any formal move is made?

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