Royal Mail Shares

egor110

The point is though the mail centers have been cut already, the amount of staff working in mail centers is a fraction compared to doing deliveries so your limited to savings on the 'indoor' work.

The outdoor work is labour intensive, if i go to your house with 1 letter or 10 letters i still have to go to your house regardless, the only way to chop the outdoor staff numbers is if the government vote to scrap the daily delivery.

Something entirely out of royal mails hands.

gadgetmind

It's certainly going to be interesting to see how this one plays out. I usually tend to avoid companies that lack international exposure but do hold a few utilities. Can RM be regarded as a utility in the same way as gas and electricity?

Buzby

The elephant in the room that nobody has mentioned, is Scotland on the basis of a 'Yes' vote, intends to rescind the franchise of any private operator and restore RM to public ownership (our water is public-owned too).

This means a major part of the UK land-mass being taken away from the remaining 'investment' and a similar reduction in value. I understand the Scottish Govt suggested that the RM sale be delayed until the referendum was completed as this would save on any complications down the line, but this was rejected.

I certainly wouldn't consider this an investment worth taking any risk over.

Glen_Clark

Buzby wrote: »

The elephant in the room that nobody has mentioned, is Scotland on the basis of a 'Yes' vote, intends to rescind the franchise of any private operator and restore RM to public ownership (our water is public-owned too).

This means a major part of the UK land-mass being taken away from the remaining 'investment' and a similar reduction in value. I understand the Scottish Govt suggested that the RM sale be delayed until the referendum was completed as this would save on any complications down the line, but this was rejected.

I certainly wouldn't consider this an investment worth taking any risk over.

I hadn't heard of that, Thanks for mentioning.
But land mass isn't profit, quite the reverse.
Its population that counts and Scotland is only about 10% very widely spread.
I imagine most of the uneconomic letter delivery adresses to be in the wilds of Scotland as they can be so few and far between.
Wouldn't they be shooting themselves in the foot by rejecting Royal Mail?

gadgetmind

Glen_Clark wrote: »

But land mass isn't profit, quite the reverse.

Most companies would far rather serve cities and ignore rural locations, hence the regulatory framework that prevent privatised utilities from doing this.

Doshwaster

If an independent Scotland did renationalise Royal Mail's operations in Scotland and (assuming it was affordable legal for them to do it) then the profitability of what was left of Royal Mail might increase as they would no longer have to operate a delivery network to rural areas and islands. They could also charge more for deliveries from England to Scotland since it would be an international service.

gadgetmind

I'm not sure an independent Scotland could even afford to nationalise The Krankies!

Doshwaster

gadgetmind wrote: »

I'm not sure an independent Scotland could even afford to nationalise The Krankies!

I thought the current First Minister of Scotland and his deputy were the Krankies

bigadaj

It is going to be regulated like the other utilities, but hamstrung by the commitment for rural coverage and with competitors cherry licking the easy city and business side of things. So it's down to how the regulator will act in my opinion, they are frequently ineffectual which might bide well but it's a risk.

I had dismissed them but might go for a couple of grands worth and either sell soon after float with a good premium or retain for the dividend but look for an out at a decent level in the first year or two.

custardy

gadgetmind wrote: »

I've gone for a few £k each for my wife and myself. I don't see this as a LTBH so have done it in our ISAs rather than my wife's unwrapped dividend portfolio.

My biggest worry isn't the RM's business model (parcels delivery is replacing falling letter deliveries) but their oppressive unions, which are a real drag on performance.

Im no union fan,however the drag on performance comes from the management as much if not more than any union influence