Member Info for Fishcakes47

21 m fcf equates to around 4p divvy at 30% return, 7p at 50% return.?

Why would a takeover be attractive? The Adderley family hold a massive amount of the shares and I can’t see them wanting to give up control.
If they did accept a takeover, if anything it would more likely be to private equity and private investors would lose being able to hold a solid, well run business.
I see bigger returns in holding this for the next decade than a 30% premium to current sp.

Thanks for replying Whippy1.

It will be interesting to see Next 15 price, past month as been something of a turn around in the overall markets and they need to gain support to rise their SP.
Would the ADVT offer not be the better one currently?
The presentation from ADVT certainly didn’t pull its punches in making out the SAA bod have very self serving renumeration options that don’t serve shareholders, clearly no love lost there and not surprising they are recommending against this offer.

I think ADVT IPO’d in March 21 so they have till March 23 with a possible year extension should shareholders allow it ( my understanding of the FCA rules).

One of this occasions I’d wished I had been less risk averse and had an initial larger position.
Still, still time to average in given the quick gains recently.

Certainly seems like a lot to come.

Is it coming up to the point the shareholders need to choose the Next Fifteen or ADVT offer?

I’m not a shareholder however have read one is now at £2 per share. What’s the thoughts of shareholders?

The disagreement was about the structure not providing enough cover for leave or days off and the threat of this causing operational and quality issues. This seems to have been a constant issue as the business wanted posties to step up to cover days off ( in addition to doing their round) yet not many seemed interested in doing so.
This was resolved by a relatively small number of manager posts being added back in and with further ongoing work to review this structure as it beds in.

Recently spoke to a German business man who had an operation in NW England and one in France, both using online sales and the English firm posting via RM.

According to him it was cheaper to post a parcel to New York than to Europe from the UK, the problem being he had few customers in North America and many in Europe. He was subsequently considering moving his entire operation to France, which was proving a difficult decision as he felt indebted to his employees in the UK.

I haven’t confirmed this by looking at international prices but an interesting view.

Considering the eurozone accounted for some 46% of UK trade and that parcel tariffs increased post Brexit, this would certainly suggest where the issue has come from.

Unsure but any debt would have to be settled before shareholders see a penny.
How much has RM UK invested from debt? Guess this would be the chunk they get saddled with.

Angersharkz

I’d guess any ‘scare tactics’ are around the following in todays statement;

Group changing its name from Royal Mail PLC
Complete non dependence across the group for the two firms - they stand alone
GLS is profitable and could be spun out if it is better shareholder value
Royal Mail is unprofitable but got a lot of assets…
Royal Mail needs to change to become profitable

Some of these points are laboured in the statement, or at the very least, made abundantly clear.
To me this is suggesting that the group is being held back by Royal Mail and could separate, leaving one a profitable business with future growth pathway and the other a failing business with lots of nice assets (many of which aren’t fit for purpose for a parcel carrier but on a desirable plot of land - not in the statement, my own view).

Could this be suggesting to the CWU and staff that Royal Mail could be sold off and asset striped if changes aren’t made? Worse case scenario for employees?

I’m sure someone will mention the USO in response, but does RM have to provide this?
Interesting that the regulator is setting a standard for customer complaint handling - a standard Royal Mail already meets but competitors don’t, and also that USO doesn’t require barcoding of items.
Start of levelling the service required across the industry to make it comparable?

Makes you wonder if the USO could be split to geographic areas, auctioned off on term leases with RM being the provider propped up to serve the unprofitable areas.

I think it was during Allan Leightons time as chairman and was resolved by restructuring the business, moving to one delivery per day and voluntary redundancies thereof.

Link below to 18 years ago and a story that chimes with now - pay rise linked to productivity, senior exec bonus and pay, WU balloting for industrial action.

PS, Socialist Worker isn’t my usual go to for news.
https://socialistworker.co.uk/features/is-allan-leighton-running-the-post-office-or-the-office/

Managerial strike action this week now called off. Ballot live till December I believe which gives both sides some time to continue working to resolve differences.

Yes showing in my account

As Longtimeinvestor states, I get 19% Haleon based on the opening price.

So by way if an example, my average price was £13.01 which marks Haleon purchase price equal to £2.47 and GSK equal to £ £10.54.

Looking at current sp at time of writing;
GSK £13.86 (£3.32 gain per share)
HLN £3.24 (77p gain per share)

Both equal to 31% gain which is where it was on Friday.

Scampthedog

Can you expand on dragging items from everywhere. What does this mean and from where?

Well I stand corrected. From an open around 16% down it has pulled much of this back through the day.
It has been drifting down over the week (as many have) but good to see a quick pullback.

Forensic

Interesting view as you sound like someone who has held much longer than I have.
Over time I take it you will have had the opportunity to bank profits, so hopefully not a loss making business for you.

I’d agree the company isn’t moving as fast as I would hope and closing the funds has stretched somewhat. Is this covid related or is that an excuse?
Is it because as they grow larger and become more recognisable in the industry the cases they are taking on are larger and more complex?
Possibly a combination of the two?

Last results did show an increase across all the metrics so I think this still can be a good compounding company, albeit at a slower rate.

Seems like a massive overreaction and I suspect by those who were hoping for this to move back towards the ATH of £1.40 ish, loosing patience, or possibly those hoping for the start of a divvy payment reallocating.

A year ago I would have expected this to bounce back quickly, not so sure in the current environment, despite it being a solid business with good growth.

Hi, thanks for taking the time to write this interesting article.
It prompted me to question a few things;
The valuation looks to be much less than the Unilever offer, which I think is now looking like it should have been accepted.
Your valuation (which seems sound) places a PE of 33. I’m guessing Haleon will be in the consumer defensive sector and looking at Stocko this PE is very high to peers in this sector.
A very large overhang of shares held by those who have stated they intend to sell.

Despite any merits of the business it does look like a difficult start to its listing could be on the cards for the next 12 months.
I’m sitting on a 33% capital gain and have been considering selling down to take profits before the split, which im leaning more towards.

I did take the time to read a couple more of your articles.

I would have ordinarily thought a large overhang of shares would be a bad thing.
Pfizer wanting to sell as soon as the lock in period ends seems to be this.

It may be best to research some of the material available.

GSK offering a c. 3% divvy would be offering the ftse yield average, so still a divvy stock, albeit lower than now and below some of the industries you mention.
The hope is that while offering a decent divvy it will invest in its future pipeline and grow faster than it has in the past (like AZN). If it can do this it should be a good long term hold.

The prospectus for Haleon states that it’s initial divvy will be between 30%-50% of FCF with a growth policy.
It does look to be fairly cash generative but with a bit of debt and a possible overhang of shares held that could be sold applying downward pressure on the sp.
It’s difficult to judge where this could go, especially short term, however it does hold a lot of recognised brands that are top otc products around the world.
I think this could have a fair bit of volatility in the near term.

These are just my takes from what I have read, so could be wrong etc. As always dyor.