Member Info for Commonsense5

Ok thanks. Just adding to view that new ceos rarely unearth better than expected news ! ..

First asos post

Asos has long term slipped due to its early mover advantage in ecom simply being eroded. Next is now as good at e com and proving hybrid model.

Other reason for long term fall is ASOS is caught in the middle as a re seller of brands who care about price control of their products. Managing each price change has to be agreed with brand owners which is at best very time consuming tricky process. Brands want to go direct. Sadly, I think asos has had its day in the sun. I think we will get a numbers miss and the market will quickly turn to another refi given decent debt on its balance sheet. Expectations are now pbt £20m to £60m (June latest) on interim debt £60m. If that is pbt is lower end debt probably goes up and suddenly a refinance and equity raise is nailed on. £1bn mkt cap for potentially £20m profit … Next all day long.

Asos is now simply a decent reseller in a world where many brands don’t need it. The value is in brand ownership and controlling one’s own destiny. Sorry just me view.

Interesting thx Mr Anger

I have no doubt plans for GLS are well advanced. The file with a plan would have been warm before this. The only question for me is where it lists OR whether PE buy it. The final alternative would be another big global carrier who could help Royal Mail and GLS and buy a % of GLS. Simon Thompson will NOT be a top 3 decision maker on this - first will be the chairman, second will be the ceo of GLS and 3rd will probably be the view of Mr K. The latter two I would expect to be pushing for a spin off. If anything, it would be counter intuitive for simon thompson to be wanting to spin off GLS - he would want it to stay in the business as it has been his funding line. However massive pressure I think from 2 and 3 to spin off. Given GLS is amsertdam head quartered I would have there BUT joint US (I would like)

Depending how GLS is spun off .. One of the biggest decisions IF spun out would be about funding. Very ballpark RMG has £1.1bn gross cash and an equal and opposite listed loan of Eur900m which is very cheap at 2% repayable in 25/26. I suspect the GLS could spin off with neutral gearing - no debt no cash but with facilities. That would leave Royal Mail with some decent net cash - which it would need !!

IF GLS is spun off for say £3bn and say 30% sold off this would net RMG £1bn. This would allow say £700m returned to holders and say £300m left extra in Royal Mail whilst RMG retains a 70% holding on a £3bn business so £2.1bn. Soooo Royal Mail itself could be a beneficiary of a spin off. The dividend would need to be reduced and / or cut until Royal Mail profits return.

Just some thoughts

Got to be right - no one needs a strike

Very interesting new piece today - I can’t copy paste but it talks of letters arriving an hour later going forward to allow better parcels delivery - 5pm from 4pm for most. Seems comercially sensible. I can’t believe the unions see this as too onerous. Maybe these discussions will help management listen to the workers and actually make some even better improvements. Think I will pick some more up Monday - I can’t believe progress on discussions isn’t being made to avoid a strike.

Mr Mac38 …

I had a funny moment a few months ago when I asked my wife if she used a beauty portal … look fantastic for example …. She replied oh no she uses this much better one for her called Cult Beauty … I chuckled … yes THG owns that one too !! …

Mr honkeytonk - I just hope as a bystander shareholder something is agreed as no one wins with striking - no one has given me a pay rise for ten years ! In fact during covid we took down on salary to help and it never went back up ! Point being much of private sector will not be getting any pay rise.

The best way to earn some extra more money to genuinely feed the family and keep the water warm in winter is to grab as much overtime as one can - a few extra hours probably make a bigger difference than a few % - just my personal view.

Management need to make the mighty Royal Mail as great a company as it can and I am highly highly excited about its future. Again if you hadn’t seen But my excitement was at peak when the union bosses spoke at the city analyst meeting who talked about ‘working together’ - it was amazing.

I honestly think Royal Mail is one of the best companies in the U.K. (and I am not senile!) to have 40% market share by virtue of the amazing posty network in an e commerce parcels market is highly highly powerful. I wish they would give out more shares to all employees and drive profitability and do what will ultimately beat the hardest thing of all … beat Amazon. One of my wisest business friend said to me recently one thing will kill Royal Mail - Amazon !

Good luck all, most important thing is feeding families which is tough for everyone but you need a job to do that and if there is overtime … grab it !!! In inflation is here long term take 5% now and probably 5% next year but work together and no strikes.

Sorry waffling on ! Nice to chat Mr Honkeytonk !!

Just seen in FT 33 mins ago that the network rail union has agreed a 4% pay rise - am sure more complex than that but that is the headline … strikes avoided

Ebit eur 8.5bn and mkt cap eur £50bn just fyi but several metrics they beat forecasts

At some point they have to agree, if unions starting point was the wrong operating profit number then perhaps their knowledge has deemed and will make them be more pragmatic as to what is deliverable

When will next years negotiation start ? …

Can’t see a scenario where GLS stays !

Watch for an odd share price spike ahead …

@mr isleworth thanks - helpful

As a shareholder I just wish everyone would agree

To my question let’s say they agreed tonight a deal - would it be slam dunk in stone OR would you be told and have to all vote on it ?

I didn’t quite get your strike fund point if you don’t mind me asking - is that money you have saved up to strike so it covers non pay ? Or do you get that from the union pot ?

Really helpful thx

Is it possible we will wake up one morning to find that a deal is agreed with the union ? Could it be as quick as that ? Guessing any agreement is then put to members ?

Fully agree mr anger ! Fortunately markets seem to be ignoring it !

Mr Derek a qualified Chatered accountant thank you. All I said was that Rmg has £1bn + of gross cash. It used to be about £1.3bn. Obviously this is offset by the two bonds at eur 900m which cost circa 2.5%. The last net cash I saw was about £300m I think, net cash pre capitalisation of leases.

The value in the Royal Mail business is indeed the m long term invested capital. Held in long term assets. Also the very very new large distribution centres size of 6 football pitches etc. the value is not in any fire sale of assets, it is the profitability that those assets allow.

Any union agreement has to be agreed on a p&l basis not balance sheet.

Not getting involved in this chat

Guys RmG has masses of money

Read the accounts !

£1bn cash on deposit !!

Mr anger - I think we are all factoring in that there is a strike ?

Anyone betting that there won’t be would be a fool. However the longer it goes on the more time bankers have to tout around GLS so win win

But yes fundamentally arnt we all factoring in a strike ?

I personally think (as you can tell from previous mails) I don’t think the public will be over supportive of mail workers striking BECAUSE if the like for like wages / total comp comparisons to industry start coming out in the press - I don’t think the public will be sympathetic - on a business losing £1m a day .. in theory. The few people I know who are postmen doing it for liftesyle (NOT saying everyone does) will lose support quickly. Union bosses should be trying to retain jobs not hike up salaries to crazy levels. As we have discussed and plenty of supporting commentary that inflation will peak at 10-12% BUT rapidly reduce to 4-5% medium term. Hence giving over 5% could be very very wrong.

Some very simple share register psyche … if I may…

So, in the share price and register there is LOTs of bad news - I think we will all agree. And the shares small rally ..

If you are a public fund or private holder we have stuck through hopefully the worst. Most investors have taken the fall on the jaw and now will wait for good news. As such, the price and register should have consolidated. There probably isn’t too much more bad news that can be thrown at us that will make holders sell. That kind of holder is already out ! Probably a long time ago !

So the next move is hopefully some positive news, if any sort. That will / should cause new buyers. The register of current holders won’t sell on a smidgeoen of good news. Indeed might buy more. Hence any new buyers on any modicum of good news should cause a decent rally ! I think we could be back to 350p quite quickly.

To my recent mails, when a stock rallies even in a small way (don’t forget 13.3p ex out of the share price so nudging 300p old money) on a huge amount of negative news … then this is a good stock to be in.

As I say just some basic register / share price psyche from 30 years as a market practitioner

Some good points tabled all thx, that help us all in investment decisions.

A year ago the Royal Mail ceo simon said at the analyst meeting . ‘before I start let the union boss speak’ … What followed was nirvana; working together for positive change said the union boss (first time ever on a city analyst meeting probably 200 on the call) and the share price hit 600p. Saye amongst others and holders shares roofed it. Everyone happy.

Let’s keep productive chat going. Thx

Does anyone know of any positive RMG vibe to the man or lady in the sheet in the City? Very few I think apart from something about GLS … but the shares are near 10% up since pre results inc divi.

We are deep into core value at RMG with hopefully positive news next either way

Mr anger

1. If unions can see the business is less profitable than £780m and say it is only £250m for Royal Mail going forward - they. Cant ask for a number that wipes out profits . they would look silly and members would lose faith. This point is massive.

2. Re Ulo - why would government help Royal Mail when it is so profitable ? Do you think ministers see beyond headlines profits and check accounts ? 99% of people in U.K. would have no idea about the existence of GLS.

Rare we differ but we do on this

Union members should all be shareholders. I would have the massive pension fund invested in the company. (Think alignment of interests not maxwell!) everyone needs first and foremost to make Royal Mail the best company it can - Which it can me

I would like to see some examples of how hard various categories of Royal Mail workers work compared to Amazon equivalents and their pay relative including pension entitlements etc and all benefits

I think if that we’re clearly set out and IF it shows what I think it will … then unions would be on the same side