Member Info for Commonsense5

A pleasure Stickywicket

In my reading of all the posts for over a year now the level of value add is generally low as to the investment case - I really enjoy the postman’s chats about how busy their offices are et. but generally speaking the whole stock market is moving towards much more company led education of retail investors but RMG don’t appear to do much of that it appears. I don’t think they use say an Edison or Hardman to get the investment case in numbers out to investors, they should.

I have been buying quite a lot of stock since the trading statement. I bought more today and the ‘institutional’ selling is clearly reducing as there was no more stock offered ‘in the darks’ today - the system that most big funds use to trade bigger lines under the radar. I refuse to believe that any active fund manager would have been selling on the back of the reassuring statement so I suspect it was black box fund or index. If they really have finished we will be back to 500p soon. Great to see the likes of Deutsche keeping their nerve and reiterating their target of 700p ish I think from memory.

The mid November statement should reassure further when they show the ‘395-400m’ operating profit in H1 on black and white with all the numbers AND we see the latest net cash number (ex leases). Obviously this H1 profit is massive versus last years H1 horribilis performance and will set them up for a bigger H2 as they have already said. Other big catalysts will be the % level of automation (remember comments from the Final presentation by the execs on the website still); comments about excess capital being returned; comments about better planned for Christmas with fewer temps that must be very expensive and obviously costs savings.

Most importantly, RMG I hope becomes a poster child for being a great employer, get this right by looking after the 100k team members as best they can, with hopefully great pensions (remember the pension is the most funded on UK surely with £3bn ++ surplus) and bring on the youngsters, and the with the amazing esprit the team shown during Covid where our postmen and women stood SO proudly then RMG can be a brilliant company.

The share price will come right but patience needed !!

Thanks JBThistle - re H2 I was simply highlighting what the company says in the announcement that H2 operating profits (and margin indeed) will be higher than H1 - the company will be being prudent in saying that and factoring in your valid point re recognition of savings - I have drafted hundreds of trading updates over the years for companies and that one line re H2>H1 is the best bit of the RNS. Whilst on I will add two points - 1. Important to FULLY understand our new ceos background .. head of product Ocado … enough said. This guy understands digital and automation from one of the best. 2. The most wonderful part of the analyst meeting post results months ago was when the ceo introduced the union boss - watch it if you didn’t, the union guy said this is the first ever time he (and probably any) union boss has EVER talked to the city. This shows huge trust. IF IF the workforce of 100k plus can align and work with the bosses then RMG could be an incredibly powerful business - £10m mkt cap EASILY. Then everyone is a winner including pensioners. What an institition for everyone’s pension fund. Finally expect to see more ESG on results - RMG to their customer is the lowest carbon foot print on how to deliver due to the platform - companies will be increasingly judged on how they get their product to the consumer - Amazon and others may be slick businesses and to be respected BUT they can’t touch RMG on ESG creds. Fingers crossed !!

Post 30 years in the City and now doing my first ever chat post …I don’t think I have seen such value as in RMG - I think given the size of the retail shareholders more must be done to help them understand the value here; in summary - this was an awesome statement this am given global uncertainties and the FedEx issues. I was more than relieved. However, for £4.8bn market cap you get the following - £400m H1 operating profit they said - they say BIGGER profits in H2 (a very confident comment at this stage given March year end!), I assume therefore operating full year profits of £900m but I would not rule out £1bn operating profit given cost savings confinuing but that is my personal view, the actual net cash at the finals excluding capitalised leases was £600m, £100m divi has been paid BUT it is possible at the year end March next year that the company will have £1bn of net cash (to repeat excluding non cash capitalised leases). 20p a share is new standard divi and they also said excess cash would be returned. Obviously big capex to automate more within RMG but I challenge anyone to find a business of any decent size as cheap as this IMPORTANTLY which is in a structural growth market and with such big market share, the list goes on. I have bought a lot of stock this am. The market analysts take a bit of time to get their throughts together these days but I expect the bullish stance to remain - I expect back to 600p ++ in a few weeks. Just my personal thoughts on my first ever chat room post !! Good luck