Member Info for Commonsense5

GLS - Even say £300m ebitda - 8x easily - £2.5bn to £3.5bn I would say - one could argue more

And a 5% divi going ex next week … with net cash in bank …

Also first time I think we have really seen Rmg talk about the 40% parcels market share … massive and structural growth

1. Great re GLS comments about spinning off - whether they do or don’t analysts will have to assess value now and comment - answer = worth the whole market cap easy
2. One union agreed - I think other will have no choice OR bigger job cuts - losing £1m a day … (pre cost savings when done …)
3. Love they mention the asset value … £8bn !!

Up they will go

I see an RMG post on LinkedIn

Agreed @ anger - only if no agreement etc on a sensible basis

@ anger

You can spin off and still maintain all the same working relationships with GLS .. let’s say stick it on Nasdaq and Rmg maintain a 60% interest holding with the same working relationships - 40% sold off at say £3bn value SO £1.2bn extra cash in the bank / returned to shareholder - is JUST one way to do it - they run as totally separate entitities - it’s easy

Great article in the Sun Telegraph today on RMG.

Been reading chat comments about Kretinksy and in my humble opinion nobody (including him) would buy RMG as a group - money aside it would be a total nightmare investment having seen again how one has to work with / against the unions.

However, I believe one thing will come from this industrial action to the detriment of the group which is that GLS will be spun off. The chairman has always said that will only happen if Rmg starts to feed on Gls’s cash flows - I would suggest that time is near. Royal Mail rather than RMG needs to better stand on its own two feet and at the minute it is being propped up by GLS. GLS’s mostly overseas employees must be wondering WTF is going on in the U.K. Hence spin it off. Ipo, sell to PE, sell to a big global carrier … many options.

The demands being asked of the unions will then be early shown to take Royal Mail profits to zero. As the article says this is RMG’s Kodak moment.

I say all this whilst maintaining that RMG shares remain fundamentally undervalued.

Helpful to understand mr Oligarch

Mr Isleworth - a helpful and passionate view - thx for sharing

Don’t forget pension fund accounting surplus almost £4bn

Mr Oli - Sorry should have read NOT everyone is like me !!

I could write alot more on the RMG balance sheet - as per posts of mine from probably a year ago - the bonds were actually trading and a negative interest rate - essentially RMG could still borrow very cheaply I would imagine even though rates have gone up. It is massively asset backed. I would buy have the company back at these levels - but they won’t. However it is great to have sooo much liquidity = gross ready cash !! Bonds are repayable now I think 2025/6 ish

Mr oli - the bonds are when the company borrowed medium term money at a great rate of 2% ish. They could repay these bonds with the cash but expensive - best to just run the bounds down. Royal Mail can borrow debt cheaply but its equity is crazy expensive at 7.5% yield ish. I would do a massive buy back down at these levels !!! But. If everyone is like me !

Mr angersharkz to elaborate

Gross cash £1.2bn
Gros debt via eur bond x2 £900m
Net real cash £300m end March
Factor in capitalised leases which is a nonsense but deemed net debt = £900m ish net debt but the real net cash os £300m

The lease number is basically 8x ish the annual rent roll stuffed in as a plug number - I ignore it but hence 2 net debt numbers

Mr angersharkz fully agreed - I repeat WTF !! Ridiculous

Mike I agree …. And the owner appears to be Post NL ! Dutch post office - WTF excuse my French ! The more i read the more I think this is bonkers - wrongly I didn’t know anyone appears to be able to use our final mile service ! This isn’t using a big of our fibre !… this is our posties carrying competitors letters !!! Don’t know how much we get paid per letter by Whistl - anyone know ? Any margin ?

Fully agree

Mr Oligarch, I can def help here !!

It most certainly has cash. If I asked most people how much cash does RMG have sitting in the bank … how many people would guess £1bn +++ ??

The answer is nearer £1.2bn !! They have two bonds of Euro 900m ish combined which offsets the cash to give (ex leases) net cash of £300m as per last reply end March. That debt is super cheap at 2% ish and repayable 2025 and 2026 ish

Hope that helps

Just read FT piece re Rolls Royce paying £2k per employee and 4% pay rise as pay deal - it says RR simply cannot afore a massive pay rise that will longer term cripple the company - RMG May have to use a bit of its cash

Hi I wonder if the person who was compiling the list of ingenuity websites or brands powered by ingenuity could re circulate the list - thanks

Thank you scamp. This is really helpful information. It is known by 1000’s of wonderful Royal Mail workers so not exactly private information !

I totally concur re not buying yet although I am chomping too as the value is crazy. I read / flicked through the report and accounts yesterday. I was reminded that GLS operating profits are greater than Royal Mail from a value perspective. The point remains important.

I also drove past the new Midlands hub a few days ago. Wow that is enormous and will be very impressive. The year to March 22 capex was something like £500m. This is a well invested business and the shares are so cheap. I need to check what caped is due to be in the current year.

However, we all know that if there is a strike the shares go lower as you say. They go lower anyway on pure uncertainty.

We are at an incredible economic time, not in a good way. Inflation is definitely already waining month on month in quite a big way. It won’t fully wain until the war stops but in the meantime the ‘natural brake’ of the consumer and corporate expander will very quickly kick in. Employees will quickly go from over aggressive pay demands (not saying the union is doing that) to wanting to keep their job. Employees need one off cheques to cope from employees NOT 10% increases that last forever - BECAUSE at some point we will get big negative inflation and employees won’t get salary reductions.

I haven’t done the full numbers but it wouldn’t take me long but I think something like a 10% pay rise at Rmg wipes out all its profit. I would hope such numbers are shared with the. Unions.

I really hope for all that a happy outcome can be achieved.

Sadly not only do the shares go lower on a strike BUT the peak going forward reduces is lowered as the market remembers the power of the unions. It is sad as that relationship appeared to be going so well.

Pls keep in touch mr scamp