**Nationalisation better than split for Royal Mail**
Reuters
LONDON, July 20 (Reuters Breakingviews) – Britain’s postal service might be better off back in the government’s hands. Royal Mail (RMG.L), which went public in a controversial 2013 stock market listing, is losing 1 million pounds per day in its domestic British operations and is headed for fresh worker strikes. Its shares are down 45% since the beginning of the year. Chief Executive Simon Thompson is considering splitting up the company’s two brands, Royal Mail and GLS, if “significant operational change” is not delivered.
A split might create value. GLS, which offers same-day delivery on parcels across Europe, the United States and Canada, is expected to make perhaps 390 million pounds of operating profit next year, according to Bernstein. Put that on larger peer UPS’s (UPS.N) 12 times forward operating profit multiple, and it could be worth 4.7 billion pounds, over 1 billion pounds more than Royal Mail’s current enterprise value. But hiving it off would still leave unanswered questions over the loss-making UK operation. The risk is that the state is one day forced to step in to keep parcels arriving on time. Arguably, if Royal Mail is cheap, the UK government would be better off buying it back now, rather than be left with the dregs later.
(By Aimee Donnellan)
Follow u/Breakingviews on Twitter
(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
​
19 jul
Royal Mail made £758,000,000 in profit, handed £400,000,000 to shareholders, and paid £2,000,000+ to their two CEOs.
didn’t it just get privatised recently?
Brought to you by ‘The Party of Fiscal Responsibility’
Privatise the gains, socialise the losses
Isn’t this incoherent? Channel 4 is to be privatized and this nationalized?
Even the USA hasn’t been idiotic enough to privatise its postal service.
>REVENUE: The U.K. postal company reported revenue of 12.71 billion pounds ($15.69 billion) for the year ended March 27, up from GBP12.64 billion a year prior, but slightly missing a market consensus of 12 analysts of GBP12.83 billion, taken from FactSet.
>NET PROFIT: The company posted a net profit of GBP612 million for fiscal 2022, falling slightly from GBP620 million a year before, but beating a consensus of GBP528.3 million, provided by nine analysts from FactSet.
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**Nationalisation better than split for Royal Mail**
Reuters
LONDON, July 20 (Reuters Breakingviews) – Britain’s postal service might be better off back in the government’s hands. Royal Mail (RMG.L), which went public in a controversial 2013 stock market listing, is losing 1 million pounds per day in its domestic British operations and is headed for fresh worker strikes. Its shares are down 45% since the beginning of the year. Chief Executive Simon Thompson is considering splitting up the company’s two brands, Royal Mail and GLS, if “significant operational change” is not delivered.
A split might create value. GLS, which offers same-day delivery on parcels across Europe, the United States and Canada, is expected to make perhaps 390 million pounds of operating profit next year, according to Bernstein. Put that on larger peer UPS’s (UPS.N) 12 times forward operating profit multiple, and it could be worth 4.7 billion pounds, over 1 billion pounds more than Royal Mail’s current enterprise value. But hiving it off would still leave unanswered questions over the loss-making UK operation. The risk is that the state is one day forced to step in to keep parcels arriving on time. Arguably, if Royal Mail is cheap, the UK government would be better off buying it back now, rather than be left with the dregs later.
(By Aimee Donnellan)
Follow u/Breakingviews on Twitter
(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
​
19 jul
Royal Mail made £758,000,000 in profit, handed £400,000,000 to shareholders, and paid £2,000,000+ to their two CEOs.
didn’t it just get privatised recently?
Brought to you by ‘The Party of Fiscal Responsibility’
Privatise the gains, socialise the losses
Isn’t this incoherent? Channel 4 is to be privatized and this nationalized?
Even the USA hasn’t been idiotic enough to privatise its postal service.
>REVENUE: The U.K. postal company reported revenue of 12.71 billion pounds ($15.69 billion) for the year ended March 27, up from GBP12.64 billion a year prior, but slightly missing a market consensus of 12 analysts of GBP12.83 billion, taken from FactSet.
>NET PROFIT: The company posted a net profit of GBP612 million for fiscal 2022, falling slightly from GBP620 million a year before, but beating a consensus of GBP528.3 million, provided by nine analysts from FactSet.
https://www.marketwatch.com/story/royal-mail-fy-2022-revenue-misses-views-as-parcel-volume-fell-earnings-review-271652952928