Royal Mail strategy is 'undeliverable', says Liberum

Janet Brum · Post by **Janet Brum** » 19 Feb 2020, 19:45

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Royal Mail was under pressure on Wednesday as Liberum reiterated its ‘sell’ rating on the stock and slashed the price target to 120p from 175p, arguing that the company’s strategy is undeliverable.

The broker said the fact that management openly questioned the achievability of its 2024 targets just nine months after its strategy launch is "hardly encouraging".

It pointed out that margins continue to be squeezed by declining revenues from the letters segment and poor productivity.

"Staff and union co-operation is needed to deliver the recovery, but industrial action seems more likely," it said. Liberum added that the dividend, which could be funded by additional debt, is potentially unsustainable and inadvisable.

The broker cut its 2021 earnings per share estimate by 56% and its 2022 estimate by 83%, to reflect high operational gearing and low margins.

In an update earlier this month, Royal Mail said recent trading was in line with expectations but warned that industrial unrest threatened its turnaround.

The company said its outlook for next year was "challenging" and that the threat of strikes by its workers put its transformation plans at risk. It said letter volumes would fall faster than expected next year and that the UK parcels and letters business was more likely to be loss-making.

At 0900 GMT, the shares were down 3.5% at 173.15p.

olilew · Post by **olilew** » 20 Feb 2020, 15:48

Rico will be delighted, he can buy a shitload more shares cheap!

GRS · Post by **GRS** » 20 Feb 2020, 16:41

This is becoming a joke. Something stinks here and it needs investigating.

roadrunner bill · Post by **roadrunner bill** » 20 Feb 2020, 16:48

Royal mail is now run by lunitics...obsessed with money..

There own gain... and the wealthy share holders.. is all that matters to these human beings..

A dictatorship.... hell bent on killing its work force for profit.... these people are in their 60's .... running royal mail.. if i was their age... id be taking myself off to greece.. and being with God... do i go to hell or am i worthy....a halo...

They look old.... why are they so obsessed with bits of papar called money ??

roadrunner bill · Post by **roadrunner bill** » 20 Feb 2020, 16:50

Karma is real.....

Kirkz · Post by **Kirkz** » 20 Feb 2020, 17:15

It's time for Rico to go.

hero22 · Post by **hero22** » 20 Feb 2020, 22:28

[quote="Kirkz"]It's time for Rico to go.[/quo

What other company would keep their chief exec on after over seeing such a dramatic fall in share price and the continued unrest since he arrived. Its soul destroying to watch your job being wrecked by greedy animals

Post by **postareale** » 21 Feb 2020, 03:47

Screen Shot 2020-02-20 at 22.24.55.png

Check out the attached graph and new clips:

Rico Back appointed CEO of Royal Mail Group

London, 20 April 2018. The Board of Royal Mail plc appoints Rico Back as the
next Chief Executive Officer of Royal Mail Group. On

Screen Shot 2020-02-20 at 22.24.55.png

1 June 2018 the CEO of
the GLS Group will succeed Moya Greene, who has been at the helm of the
British company for the past eight years.[/b][/i]

22-03-2019

Royal Mail plc (RMG.L) announces that Keith Williams, currently Deputy Chairman, will succeed Les Owen as Chairman with effect from 22 May 2019, following the announcement of Royal Mail’s Full Year 2018-19 Results.

Since the appointment of Rico Back as CEO and Keith Williams as Chairman Royal Mail share price has tanked big time. Industrial Relations and workforce morale are at an all-time low.

Share price when Rico took over June 1, 2018: 496.2 p

Share price today: 182.5 p

At the upcoming AGM shareholders should sack Rico Back and Keith Williams and have Dame Moya Greene and Sir Donald Brydon come back for an encore as CEO and Chairman. Things were so much, much better then!

Screen Shot 2020-02-20 at 22.24.55.png

Kirkz · Post by **Kirkz** » 21 Feb 2020, 19:23

hero22 wrote:
Kirkz wrote:It's time for Rico to go.[/quo

What other company would keep their chief exec on after over seeing such a dramatic fall in share price and the continued unrest since he arrived. Its soul destroying to watch your job being wrecked by greedy animals

No other company would keep a CEO who is hell bent on destroying the company.
I wouldn't trust him to sit the right way on a toilet let a lone run Royal Mail.
It seems to be his modus operandi to run the company into the ground and then sell it off in pieces for personal gain, the man is little more than a criminal.
I'm only glad I am nearer the end of my career than the begining.
I used to look forward to going to work but these days I dread the alarm going off.