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Royal Mail Share Chat (RMG)



Share Price: 204.80Bid: 204.80Ask: 205.10Change: 1.60 (+0.79%)Riser - Royal Mail
Spread: 0.30Spread as %: 0.15%Open: 202.80High: 207.30Low: 198.40Yesterday’s Close: 203.20


Share Discussion for Royal Mail




View all RMG Messages

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Redceo
Posts: 1,683
Premium Chat Member
Opinion:No Opinion
Price:210.60
RE: Questor
25 May '19
JB. You have a sensible approach. I have enough stock for the moment so will spend on pleasurable things for the time being.
 
JBTHISTLE
Posts: 1,889
Opinion:No Opinion
Price:210.60
RE: Questor
25 May '19
My thanks also. good to see a more positive report. Hopefully the bank holiday weekend will give investors time to reflect. A simple question I ask myself is "what is my average and would I buy at todays price" its up to each individual to make their own decisions based on facts and their own research.. I am happy to hold and buy small top ups when funds allow.
Redceo
Posts: 1,683
Premium Chat Member
Opinion:No Opinion
Price:210.60
RE: Questor
25 May '19
Thanks Gary and StYd for the collaboration in bringing this article to our attention. It's very much in line with my own thoughts which have by one member been called ramping. However I have constantly posted my beliefs that Rico is the man for the job and would increase the Divi to 17p (which he did) also that he would not let us down (which he hasn't) by his further considerable personal financial investment and foresight. I believe we investors have a bright future no matter what others think.
Garydav2
Posts: 1,287
Opinion:No Opinion
Price:210.60
RE: Questor
25 May '19
Cheers StYd good write up. Let's hope the shares recover to a more realistic price. I'm thinking 2.50 plus being the value and if the plans work moving back to 3.50 - 4.00 over the next 12-18 months
StYd
Posts: 356
Opinion:No Opinion
Price:210.60
RE: Questor
25 May '19
The remaining part the Questor article from the Telegraph (the first message exceeds the space allowed):

Quote:
In other words, we think the shares have been punished excessively and could recover from here.

Selling now would therefore cement a capital loss that seems out of proportion to the income damage we are sustaining. We will hold on.

Questor says: hold
Ticker: RMG

End of quote
StYd
Posts: 356
Opinion:No Opinion
Price:210.60
RE: Questor
25 May '19
https://www.telegraph.co.uk/investing/shares/questor-royal-mail-inflicts-dividend-cut-income-portfolio-do/

Conclusion, quote: 'We will hold on.
Questor says: hold'

Questor Income Portfolio: the postal service is to invest more in modernisation, with income investors taking the pain. This leaves us with an uncomfortable decision to make
An unhappy milestone has been reached: the Questor Income Portfolio has suffered the first dividend cut from one of its stocks.

Royal Mail announced on Wednesday that, while the divi for the year that ended in March would be increased by a penny to 25p a share, it would be cut by 40pc to 15p for the current financial year.

Thereafter the ordinary dividend is likely to remain at 15p, with the possibility of top-ups from special divis if there is cash to spare. The money released by the dividend cut will be used to invest in a restructuring programme.

Our previous analysis of the sustainability of Royal Mail’s dividend had focused on its apparent affordability in terms of cash generation and the existence of reserves. However, there was not much in the way of safety margin between the cash generated and what was required to pay the dividend, and the company has now said it needs to invest more to modernise the business.

That investment, and expected lower cash flow in the early years of the restructuring programme, meant the dividend had to be cut.

One aim of the transformation is to improve productivity and margins in the British operations, which will be increasingly “parcels led”. The GLS international arm is already a parcels and freight business so the focus there will be on growing sales while protecting margins.

While restructuring plans can always go awry, or fail to deliver the benefits hoped for, we take some comfort from the new dividend policy.

A cut in the divi is normally the last thing that company bosses want to preside over. In this case the chief executive, Rico Back, is in the clear because he took over only last year.

A second dividend cut, however, would be another matter so we can feel reasonably sure that he and the board think the new level is sustainable. The fact that they can contemplate special payments on top is also reassuring.

Read Questor’s rules of investment before you follow our tips
Even if we think the new dividend is sustainable, should we hold on to the shares?

The 15p-a-share figure equates to a yield of 7.6pc at the current share price of 197.9p. It follows that, if we were to sell the shares now, we would need to find a replacement investment that yielded 7.6pc to avoid a further fall in the portfolio’s income beyond that caused by Royal Mail’s dividend cut.

Such a figure automatically means a high level of risk, so we would risk swapping one troublesome asset for another. In fact, that 7.6pc yield seems too high in view of the reassurance we take from Royal Mail’s new policy. In other words, we think the shares have been punished
Garydav2
Posts: 1,287
Opinion:No Opinion
Price:210.60
Questor
24 May '19
Anyone put up the Questor article from Telegraph. I can't read it as need a subscription?




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