Royal Mail share price at lowest point since privatisation

[TrueBlueTerrier]

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Concerns about increasing staff costs and also ever declining mail volumes have meant that the Royal Mail share price has reached its lowest point since privatisation.

Obviously the current wranglings and possible industrial action between Royal Mail and the CWU are of concern to analysts and investors. A report from Credit Suisse, in particular, sounds a note of concern.

The bank has changed its rating on the British postal service company from neutral to underperform, with a target price of 325p. Well below where it is now it.

They say: “We expect worsening letter revenue trends and a costly labour deal to render 2018 earnings unsustainable.” They predict a 3% pay rise deal costing £50m a year.

The bank also notes that there are two factors behind its dim outlook on letter revenues: big banks like RBS, Santander and also the UK government are taking even more steps to cut mail volumes they send to save money. Ever decreasing mail volumes will impact Royal Mail income. Secondly, “internet use is rising fast among adults over 65, reducing the need for letters”.

The ever present reality about Royal Mail, and why the dispute seems notably old-fashioned in some aspects is that Royal Mail desperately needs to develop services salient to the new ecommerce environment. And companies such as Amazon, and the new generation of courier companies, are striding ahead.

Whilst postal workers and the CWU (communications workers union, the body representing postal workers) fixate about whether the daily post delivery should be earlier in the day, other organisations are looking at evening deliveries, Sunday time slots and same-day options for consumers. There is scope for developing parcel collection, lockers and monetising services for shoppers’ convenience. As I’ve often noted that at my local sorting office, on only one day a week can I collect a missed delivery after 14:30.

Until some key new services and developments are introduced, the Royal Mail share price will continue to suffer.

[Judgee]

Mail declining? where? Always the same old BS. My frame is full to bursting pretty much everyday with maybe Tuesday the only exception. Even Saturdays are damn heavy and that's all year round with the summer lull almost non existent now. Anyone anywhere see any decline in Mail volumes? Is there a part of the country where mail has dropped so much they can seriously tell it has fallen? What the hell are they measuring in these figures?

[clashcityrocker]

What the hell are they measuring in these figures?

Letters.
The letter traffic is declining.

[wannabeek]

They keep saying that stamped mail is declining.

So what. Stamped mail could drop to zero and have little or no impact on my day, except for the Xmas pressure weeks.

Stamped mail is a tiny fraction of the increasing workload nowadays.

[clashcityrocker]

They keep saying that stamped mail is declining.

No they say letters are declining.
Santander and RBS don't stick stamps on the letters they send out.

[borgpicard]

Certainly no decline in letter in the DO where I work, if anything its getting more and more, and thats before chrimbo has come along.

[wannabeek]

They keep saying that stamped mail is declining.

No they say letters are declining.
Santander and RBS don't stick stamps on the letters they send out.

2015-16-Annual-Report.pdf

Long document. Fig 4.1 page 22

It seems only RM stamped mail is declining, or am I misinterpreting those stats?

[Judgee]

What the hell are they measuring in these figures?

Letters.
The letter traffic is declining.

Ok where is it declining, what area of the UK? I'm in Essex and neither I nor any of my colleagues have noticed any decline in letter traffic whatsoever? Massive growth in parcels yes but we get the same or more mec and buddy boxes as we have had for many years? Are they now estimating them differently to suit their needs?

[clashcityrocker]

It seems only RM stamped mail is declining, or am I misinterpreting those stats?

Figure 4.1 shows that between 2011-12 and 2014-15 total addressed letters volumes
declined by 11.9% to 12.6bn items (c.4% per annum). Although not directly
comparable, volumes continued to fall in 2015-16.

What are you reading?

[clashcityrocker]

neither I nor any of my colleagues have noticed any decline in letter traffic whatsoever

Assuming a 4% decline as stated in the document above.

If you had 1000 letters/day on your duty a 4% decline would mean 40 letters less/day.
That is less than 2 minutes prep time per day.
If your duty has 20 bundles then that is on average 2 letters/bundle less than last year.
You wouldn't really notice it would you, especially as you have more packets.

If however you work in a Mail Centre it would be fewer yorks.
It would be more noticeable.

Maybe your area has bucked the trend. Maybe you don't have any decline in letter traffic.
That doesn't mean it isn't happening.

[k979aaa]

What it means is Royal Mail only count the mail they turn a profit on which is stamped mail PPI and mailsort the other mail is DSA which is treated as first class but it actually cost us more to deliver than we receive as we are regulated to decline our share of the market by postcomm may have changed it's name now but the rules of the game are in the favour of the private companies. And we are paying for it with lappsing job cuts our pensions being cut and Bullying and harassment in the workplace it's all very well for some journalist to say she was sexually harassed by an MP once because he touched her knee what about all the postal workers intimidated by threats of sacking them or non payment of wages they have done the work for this is the real scandal in our society not inappropriate moves! But thieving self serving bastards whom help themselves upon vulnerable workers male and female but where sexual abuse takes place it must be stopped as well as all abuse of the workers of this land!

[Lounge Lizard]

"Whilst postal workers and the CWU fixate about whether the daily post delivery should be earlier in the day ....."
I must have missed that bit of the negotiations, what, the CWU want 4am starts buy Moya says, no, she's not bringing anything earlier ?