Royal Mail - good buy?

[trex]

Reading the propectus, RM yields about 4.7% over the last 3 years.
It has a unique position, not far off from other untilities.
But there is not much time left for due diligence before applying.
Still not sure if it's a good buy or not. What do you think?

 

[grldtnr]

Speaking as a Royal Mail employee,I am not in favour of the sell off, that aside,Yes It is proven that the mail has made a profit over the last few years , but at the expense of the work force and cstomer focused service.

Employees were offered 'Colleague shares' a few years back, ghost shares as an incentive scheme, this showed a rise in share price ,but come the fruition of the scheme the shares were declared a loss and were worthless, hence I do not think for one moment that privatized RM shares will fare any better, in fact as soon as the Government has got its ill gotton gain , fully expect[ share prices to tumble.

So no I don't think the will be a good buy!!!QUOTE=trex;193885]Reading the propectus, RM yields about 4.7% over the last 3 years.
It has a unique position, not far off from other untilities.
But there is not much time left for due diligence before applying.
Still not sure if it's a good buy or not. What do you think?[/QUOTE]

 

[flecc]

I don't consider it a good longer term bet, though it might be ok fairly short term. The letters business will continue to decline due to other communication methods spread, and the rest is mostly in direct competition with all the other couriers who they are unlikely to do well against.

While they maintain a daily service to all addresses they have a cost advantage with small package deliveries, but electronic books and downloaded music will continue to eat into even that potential.

And there's a potential killer blow possible. The government has always resisted attempts by private couriers to muscle in on the daily delivery business, using the unique position of the Royal Mail as justification. Once privatised, there can be no possible justification for protecting it from the competition of the other couriers and to do so would break the EU's competition laws.
.

 

[tillson]

I'd though about it and drawn the same conclusions as flecc. Apart from the letters / post box service, they don't offer much which is different to the multitude of other couriers out there fighting for business. I think the courier market is very tough and I wonder how well The Royal Mail will do having been in state ownership and then suddenly thrown into the arena to scrap it out with the seasoned fighters. The letters business, I think will decline with time.

Incidentally, I am very much against the sale of The Royal Mail and wouldn't invest even if it was a good investment. There are certain things which should remain owned by the state, Energy, Communications, Railway infrastructure to name a few. Margaret Thatcher did us all a great disservice when she sold the utility companies and that shouldn't be forgotten.

 

[grldtnr]

And therein lies the problem! The EU wants a break up of state monopolies, so this current 'shower -in - power' have seized the moment to divest itself of the 'Mail', it also needs to be said that Labour also tried to sell the RM off,but dropped it ,realizing it was a vote loser.

The valuation of £2 billion , is not a lot in the scheme of things, keeping the post public ,lowering prices,will bring more long term to the coffers than the quick fix sell off.

It was not so long ago that the Royal mail was making large profits, the Exchequer took over 70% of it for public coffers, hence the stated lack of investment and postal pension scheme deficient.

I used to be proud to work in the 'Post' but not anymore. ( tho' the company bike was crap!)

 

[Croxden]

it also needs to be said that Labour also tried to sell the RM off,but dropped it ,realizing it was a vote loser.

Wasn't that a pay-off to a certain Aussie newspaper proprietor for his support. Ooh - look what happened!

 

[Clockwise]

I think under EU competition laws royal mail will be the biggest lead balloon ever. The point that they deliver to every address is about the only thing going for them and I think after the others(dhl, fedex, ect) all take the nice juicy high profit bits then a few years down the line after the agreements to continue service as was have expired or been slowly chipped away at then we will see some talk of bringing back/buying back the bits of the royal mail that nobody wants.

Some things I have to be honest tho I think has no place with royal mail, the holiday money and bank part of it wtf? Yep, they boosted profits in recent years by coming in the top 10 for holiday money as travellers cheques have declined greatly.

I just hope for goodness sake that yodel is killed somehow in the process, it isn't very related but yodel

 

[peerjay56]

Some things I have to be honest tho I think has no place with royal mail, the holiday money and bank part of it wtf? Yep, they boosted profits in recent years by coming in the top 10 for holiday money as travellers cheques have declined greatly.

I think you're confusing Royal Mail with Post Office Counters Ltd. The Post Office and Royal Mail are now separate businesses.

 

[trex]

the IPO is already oversubscribed, still 4 days to go - it's a good buy me thinks.