Member Info for Commonsense5

Back up to 385k shares on the dip bought back - this is good - at these levels they should be getting as much bought as sellers will give them. Doesn’t suggest any trading issues / union impasses imminent. I will be tucking in again this am. Ultimately this buy back will improve eps by near 5%

Got it sorry

So sorry what is VR ?

Sorry getting these numbers wrong re operating profit

Consensus £800m + thank you

Mr Oligarch good spot thanks - I have lost track of total consensus operating full year profit - guessing it is nearer £700m ? I can check Monday but anyway know ?

My quandary from my armchair on the RMG operating profit for the year to March 22 is as follows. The company guided at the interims end of last year to £500m operating profit for the full year to March 22 having recorded £400m in the first half to September 21 in the bag. As I said before, the LTM (last 12 months total operating profit was therefore £1.1bn! as they made £700m operating profit from September to March 21 last year having had no profits at all in H1 the previous year. Obviously there have been big cost headwinds but to have gone in the second half last year from £700m operating profit to £100m as per the company guidance and indeed about £45m in JPM’s new guidance would be a VERY big year on year fall. My own very high level view is that the company will still make at least £500m operating profit this year and possibly more. Time will tell.

Just done a quick calculation of the buy back so far - I think 3.8m shares bought back in total at say average 500p ish so £19m out of £200m. They have until July to buy the £200m but I have always thought it would be tidier to complete by end March but that is purely my conjecture. Conclusion being they have a long way to go. So 5 months to buy £180m of stock at 22 working days a month at say 500p is 330k shares every day. Volume has been high of late but often around 2m all in including closing auction - 330k shares a day is a meaningful number. One day I will find out why they slowed of late to 15k a day. I suspect on Monday they will announce they have returned to several hundred k.

The key to what was said at the interims was the line - over two years the company will get to running a ‘nil net cash’ balance sheet and reduce the net cash number via buy backs and specials. Starting from where they were that means two things importantly; 1. That ultimately shareholders will receive all the cash flows ex acquisitions and sufficient capex for the business which is a pretty rare but wonderful structure and 2. To get to that position in two years there will be another round of special divies or buy backs - I would estimate a further £200m to £400m to begin to actually get the net cash number lower when the company is still generating cash each year. Just interesting I think. To have this on top of the 5% yield ongoing is very attractive.

I hear you but a opportunity to buy more !

Don’t forget the colony has bought back stock - that could be the reason 0.48% to 0.5%

I note yesterday finally Rmg reverted to buying back bigger numbers - 216k shares - post several weeks of paultry amounts this is a good sign ! The reduction had slightly worried me. I bought quite alot this am with incredible and unusual early volume on the dip

Mr Canetoad - super high quality comments - I hope boarders take heed ! I was told years ago that insurers can make profits whatever they want - I haven’t touched them since. Stockopedia is a great tool for a quick check on the quality of a business. Royal Mail is a quality business. Post 30 years in the stock market I can confirm it is a casino - be very careful !

A very good day, and still super cheap both for classic extreme value but especially for structural growth !

Thanks mr beatlejuice - yes I get that but point being RMG is a quality business and 35% ish of the U.K. market, perhaps twice as big as anyone else - the ‘rating’ or ‘multiple’ is less than half its peers. Everyone wants GLS to stay with RMG as that appears the right thing to do but ultimately unless a value gap can be closed, it is possible an aggressor apppears to force change for value sake rather than business sense. Let’s not open up that debate but we have a big value situation in RMG, my guess is that profits will be strong and the sector is in vogue last few days. ??

In the last 5 days Deutsche Post is up 5% + on euro lockdowns to Eur 70bn mkt cap, that is up around Eur4bn - almost RMG’s mkt cap !

UPS is up almost 5% in 5 days to $170bn - that is an $8bn rally which is more than the mkt cap of RMG !!

At some point RMG will have it’s penny drop ‘catch up’ moment !! Be patient - UPS was on c. 17x pe (more than 2x RMG). DP was on 14x pe - I suspect now 15x- again pretty much 2x RMG

Happy Christmas

Mr Teamlh - A truely hopeless valueless comment - please add proper value with comments positive or negative or don’t bother

Mr Lokilo great spot

Hi all, anyone know when the shift to premium index might happen very roughly ? 6 months ? Guessing a few boxes have to be ticked before it can happen - this is when it will extra exciting when the trackers start to buy in - thanks if anyone can help

You Wally ! Strike soon ? The union is saying this is a ‘positive development’ !!! Maybe read it first !! Rare I get annoyed by posts but you’re annoyed me

Hold onto your hats

I expect a proper rally near term now on RMG

Those analysts who were right all along will want to prove themselves correct and push the stock - not a huge amount you can push at the minute !

Another Royal Mail early pressie today …

Holders have to read the Times articles today about Hermes today - do read it online to see the video - an undercover reporter reports of the torrid behaviour of some of the Hermes team where parcels are routinely thrown around the depot - all on video !!! Ouch … M&S, Next and John Lewis named !! (Which they won’t like). I have to say I have always thought Hermes was a particularly grubby business HOWEVER … this is very positive as it highlights RMG positively. The last analysis I have I think from the Times actually is a chart with Royal Mail 30%, Amazon 15% and Hermes next at 12% as the third biggest. Many customers will now take immediate action and many will switch to RMG.

This share price will quickly track to 600p now and even then look cheap. Broadly 65p of earnings per share to March 2022 moving to 70p in two years - this is the reason why 650p being 10x pe multiple is still cheap ( last I looked UPS on 17x and Deutsche Post on 15x). 800p + easily achievable

Another good day ahead