Watching marauders flounder is a boost for Moya Greene

[TrueBlueTerrier]

Watching marauders flounder is a boost for Moya Greene as she seeks to bring private sector discipline to Royal Mail

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Is the Royal Mail lucky or not? The privatisation in 2013 was badly flawed because of City advice which led to the shares being grossly undervalued.

Moreover, having promised that a chunk of the shares would be reserved for UK long-term investors, among those who made the biggest profits were a select group of hedge and sovereign wealth funds.

The achievement was that a public asset, which previous governments had been too squeamish to sell-off, finally was brought to the stock market. Clearly, the issue was mispriced with the valuation failing to reflect its property assets, such as the large-scale Mount Pleasant development in central London, and the value of the European parcels business GLS.

The challenges for the Royal Mail came in the shape of competition from more efficient private-sector players in the parcels market and the secular decline in ‘snail’ mail.

Big market shares in both post and parcels always made the Royal Mail a formidable beast. But it was assumed that its sub-optimal services, such as poor tracking of parcels and queues at Post Offices, would always put it at a disadvantage to low-cost, non-unionised newcomers.

Instead of eating its dinner it has been the newer entrants to the market that have suffered. In the unsafe hand of private equity – which does not like to hang around if things are going wrong – the plug was pulled on City Link over the Christmas holiday by owner Better Capital. Now Whistl, formerly Dutch-owned TNT Post, is laying off 1800 workers in Manchester, Liverpool and London after the private equity arm of Lloyds Bank LDC decided enough is enough. It looks very much like curtains for its end-to-end delivery service in the UK.

All this must be good for the Royal Mail. It has indicated in the past that if Whistl met its objectives of 40 per cent household coverage, the impact on its own revenues could be in the order of £200m a year.

Those with an eye on Britain’s electronics market will see a parallel. The demise of Zavvi, HMV and Comet breathed life back into Dixons, owner of Currys and PC World, which has since bulked up through its merger with Carphone Warehouse.

Watching the marauders flounder must be a real boost for chief executive Moya Greene as she seeks to bring private sector disciplines to the Royal Mail. She could never have dreamed that Royal Mail’s domination of UK deliveries would be restored so quickly.

[Lounge Lizard]

"Moya Greene could never have dreamed that Royal Mail’s domination of UK deliveries would be restored so quickly."
So she must be due a monster bonus this year.

[slinder123]

wheres our bumper bonus without us they could not have done it