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Royal Mail Share Chat (RMG)



Share Price: 378.50Bid: 378.30Ask: 378.50Change: 5.60 (+1.50%)Riser - Royal Mail
Spread: 0.20Spread as %: 0.05%Open: 373.10High: 379.30Low: 373.10Yesterday’s Close: 372.90


Share Discussion for Royal Mail


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Grayling
Posts: 988
Observation
Opinion:Hold
Price:376.50
RE: An investors perspective
Today 09:47
At last a vitriol free post with a balanced view of the business! See also this piece from Moneyweek for similar:
"It's been nearly four years since Royal Mail was privatised. Whatever the merits of the decision politically, it?s been a poor investment, unless you were among the many small investors who "flipped" your shares early in the process. If you'd invested at the peak in early 2014, when the share price stood at more than 600p, you would have ended up losing nearly 40% of your money. The price has fallen to 376p, below the price at which it first listed. It recently suffered the shame of being demoted from the FTSE 100, which may force several funds to sell their holdings in it. There are plenty of reasons for investors to be concerned. A dispute over changes to the pension scheme mean there is a strong chance that the company will face industrial action, which would hit revenues and reliability. In the longer term, it faces competition from Amazon, which has shifted from being a major customer to a competitor, investing large sums of money in its own distribution network. And in the longer run, drone delivery and 3D printing could make the whole idea of human beings delivering parcels an anachronism. However, the fact remains that the company is making substantial strides in dealing with these changes. It has worked hard to cut delivery deals with retailers, including signing agreements with Marks & Spencer, and John Lewis. These contracts have enabled it to benefit from the rise in parcel volumes as retail sales continues to shift away from bricks and mortar towards online commerce. Royal Mail?s GLS subsidiary also helps it to benefit from growth in e-commerce in continental Europe. There are also signs that its recent investment in information technology is helping it to streamline costs, making it more competitive with its rivals. Even if Royal Mail proves unable to turn the core business around, it is sitting on a lot of valuable real estate, much of it in London. It has already sold some of its surplus property to reduce its debt, but it is still trading at a discount of around 10% to the value of its tangible assets. And if you include intangible assets, this widens to 25%. It also looks cheap compared to earnings ? it trades on a price/ earnings ratio of around 9.6. Its ability to generate lots of cash means that even if the worst comes to the worst, it should be able to keep paying the generous dividend of 5.8%. At these levels, the bad news seems priced in. So I?d suggest going long on Royal Mail at 377p."
 
Peter450
Posts: 739
Off Topic
Opinion:No Opinion
Price:372.90
An Investors Perspective
Mon 19:37
I had some of these a while back which i got via the IPO, I held them for a while but sold out as it was a small holding (retail investors only got given a tiny allocation). It currently looks like it's at a reasonable price for a longer term buy and hold investment. Currently just watching as it could well drift lower in the short term due to the current issues. You never can be certain with any share just how well it will do long term but the company has been around a long time and is a big player in the industry.

Having said that I do think a lot of the current postie bashing to be a bit misinformed to say the least. Most companies fail due to bad management not bad employees.

While employee pay is something firms need to keep on top of, senior management also need to lead by example when asking employees to take a cut, more so since they tend to be much better paid to start with and have received much bigger increases in pay over the years !!

I don't know how hard being a postman is. Perhaps a posties life is an easy one and pay needs to be cut or perhaps management want quick profit wins (and a nice bonus) by cutting costs in the short term at the cost of creating perhaps more serious problems down the line.

Goggle the case of Roadchef employee shares to see a nice example of management employee relations. And if you think being a shareholder makes you immune from how management treat their employees think again. Their attitude to employees will likely likely mirror their attitude to their investors. If they don't care about the staff they will likely not care about you either.

A quick look at provident financial should give anyone who thinks you can just replace people and hand out the jobs to someone else for cheaper pause for thought. A lot of experienced debt collectors got replaced to save money. The new lot were not so good at collecting debts, defaults spiralled and along came some nice profit warnings. Result a massive share price collapse and the departure of one literally very fat cat.

From an investor perspective senior management are the ones you want to have your eye on not then buy delivering the mail.
spaceman07
Posts: 4,451
Off Topic
Opinion:No Opinion
Price:374.20
RE: Jonjo
Fri 16:03
Good post jonjo, you can hammer posties as much as people like, though the gravy train must come on board too.
jonjo
Posts: 6,101
Off Topic
Opinion:No Opinion
Price:376.60
RE: Jonjo
Fri 08:54
Spececake - that was actually a very informative post with some incisive points. You may have guessed that I am not a postie but neither am I a till operative at Tesco which I am also invested in.

In virtually all cases middle management control i.e. Costs run hand in hand with othe cost controls and in most cases it could it could be argued that over time you end up with more chiefs than Indians. As for performance related pay i.e. Bonuses I do believe that this works especially for the BOD perhaps the part time Moyà should reduce her pay along with the other members of the BOD in favour of targeted related pay linked to return on investment etc.

Mad is a true example of the dying union influence of the 70's and thank goodness for that. Times change but I will be honest and say my investment in RMG is related to Dividends and SP uplift. I will leave the running of the company to those that are paid a lot of money to achieve results.

In any event good luck and I hope the industrial action is over asap as it only ultimately harms all parties.
ARSENAL17
Posts: 1,788
Off Topic
Opinion:No Opinion
Price:373.30
Spacecake
Fri 07:41
By the way you cant compare Google to Rmg as there businesses are completely different and the latter has had an awful lot of money spent in investing in people and the business and to creat its brand ,rmg are a long way from being anywhere near google im afraid at the moment
ARSENAL17
Posts: 1,788
Off Topic
Opinion:No Opinion
Price:373.30
Spacecake
Fri 07:34
Aren't some of your management level ex posties or are you referring to senior level and as for pension contributions well a lot of other established companies have taken that view of paying a bit more or receiving less im afraid its a choice some have to consider as rmg are a private business now with shareholders so if they do not receive some kind of profit for there money where will you get your investment from if they walk away also you say that rmg are modernising fair enough that is what people need to hear but this has to continue and to do do this will come from investment so you see it is not as straight forward to raise revenues as you say just from senior management cuts in salaries more has to be done as well as that , it may well have to come down to a number of factors so that means ALL parties will have to compromise not just management
Spacecake
Posts: 649
Off Topic
Opinion:No Opinion
Price:373.30
RE: Jonjo
Fri 00:01
Well I know it was aimed at mad but as you threw it out there into the public domain. There are no 1970s attitudes it is a myth thrown up by management in order to try and justify their actions. Old style union practices have also mostly gone. Long gone are the days of striking for weeks because the toilets took too long to fix. Todays union the CWU, are trying to talk with management first before strike action. Not something an outdated union of the 70s would even consider!

We already are automated with walk sorting machines being introduced a few years ago and buddy boxes prepped with larger mail items. I believe they are also looking into the introduction of parcel sorting machines at some time in the near future. Bikes have gone in favour of van sharing to accommodate the increase in the parcels market. We are also on the second generation of scanners. RM is pretty much as up to date as any in the market at present. No company is truly modernised as progress means even if a company updates something today, by tomorrow it is often outdated.

No easy way to reduce pension costs so need to increase profits somewhere to cover it. Increased employee contributions is an option potentially, though it won't cut RMs contributions and that's a problem at least in their eyes.

Cutting overheads is the only real area in which savings can be made. But this does not included the lowest level in the work force. You can't get blood out of a stone. The grunts on the ground are already cut below the basic level needed to function properly. Only real savings are a management and bonus cull, something the workers have pointed out time and time again which has obviously gone ignored. After all why would those in charge deprive themselves of their pound of flesh voluntarily?

Results orientated culture. Wrong avenue to go down. Might work for big retailers like John Menzies but the business model is far far different from anything RM do.

As for dragging RM into the 21st century they have been there for quite some time. It's only the management that seem to have gotten left behind. Slash and burn, treating your employees like dirt all very outdated. Modern companies have proven that if you treat people like human beings they go that extra mile. Take a look at Google as a good example!
jonjo
Posts: 6,101
Off Topic
Opinion:No Opinion
Price:373.30
RE: Jonjo
Thu 22:58
Mad:

Get rid of 1970' attitudes and old style union work practices, automate and update where possible and practical, reduce pension costs and increase employee contribution to the pension given that people will live longer and the pension is unsustainable in its current form, cut overheads where possible including bonuses and pay for the BOD and make it a results oriented culture from management down, in otherwords drag à tired out of date company into the 21'st century.

Will that do for now??
madasaballoon
Posts: 52
Off Topic
Opinion:No Opinion
Price:373.30
RE: Jonjo
Thu 20:07
@Jonjo That is a very constructive response....still what it does show is that your words are completely meaningless as you have absolutely no idea what it is your talking about. So I will try one more time, what do you mean by modernisation lets see how you get on this time.
Spacecake
Posts: 649
Off Topic
Opinion:No Opinion
Price:372.10
RE: Jonjo
Thu 14:51
There is a strong vibe that this ballot will be a massive yes for strike action. If Moya then fails to address the issues in hand knowing the impending strike action will be substantial I see every reason for larger share holders to call for her head. If this happens we all win, both staff and share holders. She has made cuts in the wrong areas, sat and watched as RM dropped out of the FTSE100, so far failed to personally get involved in negotiations with the CWU and overseen a massive drop in share price. Time she was gone and I mean that most sincerely as both a share holder and an employee.




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