Royal Mail stock?

[Ryland]

I’m US based so I’d love JR to hear first hand from all of you that live in GB how you think Royal Mail is doing and if you think they’ll still continue to be in business well into the future.  Looking as an outsider their stock seems like a crazy bargain at these levels!!  What do you guys think?

 

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Added 0 minutes later...

Also are any of you invested?

[bluemoon]

It's hard to say of course, but somehow they're managing to survive despite the move away from letters. Post boxes used to be collected 3 times a day with people's letters and cards filling them to the brim. Nowadays people send emails and internet memes, and postboxes are collected just once a day and are next to totally empty when collected (I've seen the postman open up the boxes). Add to that, competitors have sprung up which totally undercuts anything Royal Mail can offer from a medium parcel upwards, which has sectioned off large portions of the eBay/Amazon market. 

But they still manage to keep ticking over somehow. They are still the best option for letters, large letters and small parcels. So the eCommerce boom has been of benefit to them too. Plus their partner, The Post Office, also has extra-curricular services like processing driving licence applications, passport applications, and can operate as a sort of bank.

There have been multiple stories about how so many Post Offices are closing everywhere. This seems to have stabilised now, so maybe both Royal Mail and the Post Office have reached the bottom stock market wise. My personal dealings with Royal Mail (I have a business account with them) is that they are utterly incompetent on an operational account level, but their mailing service is very, very reliable.

Might be worth a punt if their stock is that low and you can afford to take a hit if it goes bust. There is more upside than downside, it can't really go much lower. It is something of a loved national institution so I don't think they'd ever be allowed to fold.

[watchesandwhisky]

I would be wary.

I run a ebay store and am self employed i have done so for four years, sales have been down massively last six months and down in general over last year this is the main run upto christmas ,and with over 500 items that were selling well i am hardly selling at all - I am starting to have no option to look for employment, many ebay business sellers are closing shops and doing the same across all categories - this seems to be due to Chinese sellers flooding the market place and using UK addresses, so even though the item is posted from china it appears to come from the UK - often cheaper than the price of the stamp it would need to post it. . same with other selling platforms. lady in post office says people coming through the door to post packages/large letters is down dramatically and they are one of the most profitable things for the post office, and that the long lines that can be seen of people paying in a cheque or withdrawing a pension isnt profitable. 

ebays days are numbered now and this will hit post offices quite hard i think. 

• All of this may not make a blind bit of difference in the end to them but this is what i know.
• not the question but being a long term ebay buisness seller i would not invest in them ever - they have had their day and amazon have all but won, ebay are trying to copy amazon and this is what is harming them.  

[vand]

Delivering letters and parcels is neither a specialist or a high margin business, and there's other firms who have proven then can do it better and cheaper. 

All businesses need to grow to survive and prosper, and I don't really see whats going to drive an increase in sales for RM. For a business that should reflect overall business conditions, if they can't do well in a bull market think how badly they'll do in the next bear market. For anyone who thinks "it can't go much lower" for anything... there is no law, no rule that sets the a floor on any price. RM is valued at £3bn. Few businesses that continue to fail will command that sort of market value for long. Shareholder value can and does disappear when companies stop making profits, start making losses, and are forced to sell off their assets. Not saying that that is the future for RM, but it is at least possible for any poorly run company.

[Blockhead]

In addition to the above, I believe RM also had enormous pension liabilities 

[Ryland]

2 hours ago, Blockhead said:

In addition to the above, I believe RM also had enormous pension liabilities 

I'm sure they do, I think that's going to be a big problem for lots of older large companies going forward in the near future. Thanks for all the info guys! I'm still kicking around the idea of buying. I just can't imagine a world without letters but maybe the world's changing and I'm getting to old lol

[mr-dead]

I work for Royal Mail (in projects & transformation) and have a chunk of shares.

Royal Mail are currently in the transition phase from a letters company that handles parcels to a parcel company that handles letters, we also have several new products and efficiency schemes coming online with new ways of working that will drive profitability.

To address some points raised:

• Pension liability - transfered to governement on privitisation
• Royal Mail will not go bust, their property portfolio is worth billions alone.
• USO (every address, 6 days a week) is a bit of noose strangling profitability, never mentioned but I believe this will end in the future.
• Parcel growth especially around tracked items is an area of constant growth.
• D2D (junk mail) - to become automated driving down costs for customers increasing growth.
• New products working local councils like call and check (on elderly and vunerable people) creating new revenue streams.
• Share dividends are extremely attractive.
• There has been mention of post office closures - this is seperate company and not Royal Mail
• Royal Mail's estate will be reduced through new ways of working freeing up significant capital.

All in all i am happy to hold my shares currently

[JunkBond]

17 minutes ago, mr-dead said:

D2D (junk mail) - to become automated driving down costs for customers increasing growth.
 

It needs to, I own a company that uses the D2D service and price increases are frequent plus the delivery leaves a lot to be desired when temps are filling in.

 

[mr-dead]

23 minutes ago, JunkBond said:

It needs to, I own a company that uses the D2D service and price increases are frequent plus the delivery leaves a lot to be desired when temps are filling in.

 

The problem with Royal Mail is nots not like Mc donalds.  Every office seem to have their own way of doing things, some do it well others not so well.

When the automated D2D's get rolled out nationally there will be a new standardised methods and control process put in place along side it.  The quality and commercial team will also be crawling all over it to ensure standards are met.

[JunkBond]

I will keep you updated. 😂

[Cornishfarmer]

Just an idea @mr-dead we live in the sticks and my parents and grandparents can’t get a newspaper every day unless the y have a 12 mile round trip, if they delivered papers would be big here

[Thelonerangershorse]

17 hours ago, mr-dead said:

When the automated D2D's get rolled out nationally there will be a new standardised methods and control process put in place along side it.  The quality and commercial team will also be crawling all over it to ensure standards are met.

High quality junk mail,   can't wait.

[JunkBond]

1 hour ago, Cornishfarmer said:

@mr-deadif they delivered papers would be big here

In my experience the guys on the ground do not want to deliver anything, just get paid...

[mr-dead]

1 hour ago, Thelonerangershorse said:

High quality junk mail,   can't wait.

Most people call D2D "junk mail" but it obviously costs in and attracts new customers as the companies wouldnt spend on the product if it did not.

 

45 minutes ago, JunkBond said:

In my experience the guys on the ground do not want to deliver anything, just get paid...

You would be suprised, the job is getting tougher and you havent seen how much parcels and mail the guys walk out the door with in the morning.  Coming from a mail centre background there are a lot of older posties with knackered legs and backs from doing the job for years in there.

[JunkBond]

23 minutes ago, mr-dead said:

there are a lot of older posties with knackered legs and backs from doing the job for years in there.

I have to admit the average age of a postman in my area is 50+  This is a bit worrying. Who will replace them? 🤔

[Ryland]

I wonder if it’s similar to here in the US.  The post office when I was young would hire old military veterans.  They were always very professional and their uniforms were always complete and pressed.  Now it seems they hire the dregs of society to keep them off welfare.  Most times I see them they either have no uniform on or just a wrinkled dirty shirt from their  uniform and the job performance matches their look!

[AppleZippoandMetronome]

I have made my primary income via my eBay shop for the last 5 years now and in that time I have to say that I can only applaud Royal Mail for the advancements they have made in terms of the service they offer someone like me. The modern Click & Drop system is the shipping label system of my dreams. I've used just about every system out there from all of the couriers and Royal Mails old system but the new one feels like every frustration I ever vented over all those other systems was written down and addressed. I really love it. I also love the advancements that have been made with delivery confirmation on small parcel sized items. I think if Royal Mail made more noise about this fact they'd steal more small parcel level service from myHermes as it is a much better service at a much better price. The only thing further I'd like to see that would make my life easier is parcel drop off boxes. I know this is being trialled currently but it would be very nice to see it rolled out nationally. I'd love to be able to save some extra time in my day by combining the parcel drop off with walking the dogs.

The point of the above and why I felt that it was relevant to this thread is because the way I've seen Royal Mail moving forward and adapting in the last few years gives me good reason to believe they will remain at the top of the game for many years to come.

[Pipers]

I have a few RM shares.   The postmen have improved the last few years where in the past they would put letters in neighbours letterbox they now seem to put them in the correct house or is this just on this my street?  There small parcel delivery  is the best in th UK imo.  

As a customer of royal mail i would say they have improved over the last few years and they have a good investigation team if a parcel goes missing.   

 

[Mcgrimes]

It’s worth noting that RN shares are trading under book value but quite a margin, but the sloping profits is concerning.

[Uksilverstackers]

On 1 November 2018 at 10:57, mr-dead said:

Most people call D2D "junk mail" but it obviously costs in and attracts new customers as the companies wouldnt spend on the product if it did not.

 

You would be suprised, the job is getting tougher and you havent seen how much parcels and mail the guys walk out the door with in the morning.  Coming from a mail centre background there are a lot of older posties with knackered legs and backs from doing the job for years in there.

Most people are at work all day and I typically buy and use the click and collect option which gets my parcel delivered to my local supermarket for me to collect. Whenever I get a RM delivery they leave a card si I pop down and the queue is always out of the door. 

Imagine the money and time saved if RM just offered a click and collect service at the local PO, because they are using resources just to deliver a card to tell the customer to collect!

[vand]

New lows. What a dog. Avoid.

https://uk.news.yahoo.com/royal-mail-shares-plummet-posts-103300362.html

[Mcgrimes]

I’m interested in seeing an updated book value

[mr-dead]

On 29/01/2019 at 10:46, vand said:

New lows. What a dog. Avoid.

https://uk.news.yahoo.com/royal-mail-shares-plummet-posts-103300362.html

Still expecting a £500 - £530 million profit.

 

Only a matter of time until the USO (every address every day) is killed off and a more efficient delivery model is put in place, those profits will rise 30% overnight.

[caloundracats]

You forget @Uksilverstackers  hat you can arrange for your parcels to be re-delivered. Not everyone wants to collect their parcels. What about those who don't have a car? Yes, there are people out there who don't. Most public transport won't go near a Post Office depot.

What about the elderly or disabled/infirm who can't get to a depot or post office to collect. It's easy to think only of ourselves and our situations but RM need to consider everyone. Seems they are doing so if they are about to implement welfare checks.

Your postman may also be delivering mail to you alongside a card telling you of your missed delivery. That cost has been factored into the purchase cost of the parcel.

I'm very fortunate as my postman is fabulous, problems only arise if he's on holiday!  I'd give him a pay rise if it was within my remit.

[GrahamDiamond]

EBAY Is now making sellers add a Tracking Number on their Sales as Standard, so the days of one coin being Posted in a Standard Envelope and a 2nd Class Stamp Applied look to be over. Royal Mail should make more profit through this Ebay Decision, there must be Hundreds of Small Parcels sent daily without Tracking through Ebay. What are your thoughts Coinsters !! Ebay users/sellers ? I think this comes into force from early March and straight away for new sellers.