ROYAL Mail (RMG) could be on its way out of the FTSE 100, again, at next month's quarterly review after seeing its market value plummet, amid missed profits targets and an ongoing union dispute.

[POSTMAN]

https://www.fidelity.co.uk/markets-insi ... -ftse-100/

ROYAL Mail (RMG) could be on its way out of the FTSE 100, again, at next month’s quarterly review after seeing its market value plummet, amid missed profits targets and an ongoing union dispute.

Royal Mail shares have plunged in value after the company fell short of its profit target. Adjusted operating profits for the year to 27 March came in at £758 million - below analysts' expectations of closer to £771 million - as cost savings failed to measure up, net debts were shown to have almost doubled in a year and parcel volumes continue to tumble from their lockdown highs.

Shares in the FTSE 100 company, which gained around 50% last year, are now trading close to an 18-month low.

The 500-year-old company, which first joined the FTSE 100 index of blue-chip companies shortly after being privatised in 2013, quickly gained a market capitalisation of nearly £6 billion. Today, with a market value just short of £2.9 billion it is facing relegation once again at the June reshuffle.

Companies in the FTSE 350, which includes FTSE 100 and FTSE 250 companies combined, are usually promoted into or demoted out of the indices quarterly through a FTSE reshuffle. For a company to face relegation its market value must be below that of the 110th biggest company by market cap.

In its latest set of results Royal Mail missed its annual profit expectations, but said it could meet 2022-23 market expectations of UK adjusted operating profits of £303 million if it reaches a deal with the union in line with its current offer, and avoids a strike.

But previous wage talks have been fraught and analysts expect this round could also rumble on, damaging Royal Mail share price further at a time when it is already facing a slowdown in consumer demand, the end of the pandemic parcel boom and the trials of rising inflation. And of course, a jittery global stock market.

Describing Royal Mail as “at a crossroads” chief executive Simon Thompson acknowledged the need to fast-track the group’s transformation. And analysts would appear to agree. Broker Berenberg has just lowered its price target on Royal Mail from 650p to 575p.

Bluntly stating there was “no reprieve” for the stock just yet, the broker which has retained its “buy” rating on the shares, believes that over 90% upside is possible, once sentiment shifts in favour of the stock.

With the FTSE 100 already jittery, Royal Mail’s inglorious descent to the bottom of the pile as the biggest faller on London's benchmark index, could not come at a worse time with a reshuffle imminent. The FTSE 100 is reshuffled on a quarterly basis in March, June, September and December.

For Royal Mail and its investors if it is booted out of the FTSE 100, once the shock has subsided, the task at hand remains the same - to adapt this delivery stalwart to the needs of the post-pandemic world and ensure it doesn’t just survive, but once again starts to thrive.

[wandle]

As of market close on Friday 20th May, there are 28 companies in the FTSE-250 who each have a market capitilsation bigger than Royal Mail.
So, barring a leap in our share price before the end of the month, we will certainly be relegated from the FTSE100 at the next review, in early June.
I think we were very close to relegation at the last review, but the shares are now 30% lower than they were back then

[Dorset Plodder]

Oh Dear .. Too Bad .. Never Mind

[clashcityrocker]

We're a bit like Norwich or Fulham.
We get a run of good results, get promoted, find we can't actually live with the big boys, get relegated.
Nobody takes us seriously.

We need a serious injection of cash to get a few decent experienced players, upgrade the training facilities and then maybe look to qualifying for one of the minor European competitions which in turn would generate more cash and attract better players.
As it is I wouldn't be surprised to find Wayne Rooney as the next CEO.

[NWpostie]

Market volatility is always going to happen, we've been there before, the usual caveat when buying shares is "values can go up and down"

You need to think long term not short term, I'm keeping hold of mine purely for the dividends which in time can be more than the actual value of the share holdings and I brought some extra share via the IPO, then as and when I'll sell them to fund my retirement plans.

[Dorset Plodder]

I'm hanging onto my shares. I'll leave them to the Grandkids ..... they could probably get themselves a Mc Donalds Happy Meal with them by the time I croak!

[mjd24]

Anyone bought anymore shares recently?

[RobertT]

Anyone bought anymore shares recently?

Lots of posties buy shares via the Partnership & Matching scheme.

[mjd24]

Anyone bought anymore shares recently?

Lots of posties buy shares via the Partnership & Matching scheme.

Indeed. I forgot about that, i did sign up for that initially then pulled out after a few months.