A few thoughts! The Sun no longer set's on British Empire

[stephen500]

So Royal Mail is having to shell out £28 million pounds in fees for selling the great Royal Mail. I can tell you as a share holder I am not impressed. I am even more annoyed to find out that out of a projected profit of £400 m they are planning to pay £133 in dividends. Then there is the £900 m they are having to re-finance and it's associated interest costs. That's before they draw down on any of the £1.4 bn debt facility. So if our terms and conditions are not going to change and RM has to pay out dividends, interest payments and higher costs to the board (I am sure their pay will increase, they will now be in charge of a private business and will no longer be subject to ministerial constraints). How on earth are RM going to pay for all this? Well some might say....They need to reduce RM biggest cost and their are two ways to do this. First, reduce overtime and secondly increase redundancies to the level when the Post Office telephones were privatised, which is a lot. How would you get this reduction in head count? Well that's were the new borrowing facility comes in. Nice new packet machines, operating in a very quiet office, quiet because they take few staff to run them. Finally some irony. Royal Mail, that once great British icon, will now in part be owned by the Germans. Well the Royal family has come full circle. And to top it off, this great British institution will now be owned by governments and firms who happen to be where the British Empire's sun never set. As Putin's minister put it, we have become a "small island", with little influence and I would add very few possessions to our name. The Sun no longer sets on the British Empire, it faded away a long time ago.

[nataddick]

The full year dividend is actually £200 million - the £133 million is pro-rata for this financial year.

An interesting point is that Royal Mail in recent years (post Moya) has taken to showing it's profit after transformation costs which has the impact of lowering reported profits. However, the new shareholders will not allow Royal Mail to continously invest in the business at the expense of distributing profit. By there very nature, transformation costs are non-recurring items and should start to either disappear or be minimised and guess what - Royal Mail's profits will start to rise quite significantly.

[janitor]

Yes but the profits at the moment are artificially higher due to closure of MCs and D.Os and the sale of property, so in future years once these have finished the profits will tumble.

[barbario]

Yes but the profits at the moment are artificially higher due to closure of MCs and D.Os and the sale of property, so in future years once these have finished the profits will tumble.

Thats exactly what i've said n other threads .
Its all smoke and mirrors.

[stephen500]

Wait till they have to start spending on maintainance again.

[fishtank]

They will also have to start paying tax instead of using the modernisation costs to offset liabilities as they have done for the last few years.