The Lemon Fool

RMG HALF YEAR REPORT

https://www.londonstockexchange.com/exc ... 16895.html


Surprisingly they only reduced the interim dividend from 8p to 7.5p.

( also posted on Company share news board).

From the above link;

Dividends

The final dividend of 17.0 pence per share in respect of the 2018-19 financial year was paid on 4 September 2019, following shareholder approval.



As previously stated, our new dividend policy reflects the additional investment required to turnaround and grow our UK business. The Board has declared an interim dividend of 7.5 pence per ordinary share payable on 15 January 2020 to shareholders on the register at the close of business on 6 December 2019. The ex-dividend date is 5 December 2019. The Board expects to recommend a full year dividend of 15.0 pence per share for 2019-20, in line with new

Ian

This HYP dog keeps biting, dividend cut and shares down another 15%. To think, the Govt. were initially attacked for selling RMG too cheaply.

Wizard wrote:This HYP dog keeps biting, dividend cut and shares down another 15%. To think, the Govt. were initially attacked for selling RMG too cheaply.

Yep, checking my records I bought at the IPO, "stagging". Then forgot to sell em as they were certificates and it was all a bit of a faff. Eventually offloaded them at 432p months later.

Sobering to see them at this level.

At the IPO I recall I was content that they had some asset backing in the form of freeholds that looked potentially valuable. No idea if that is still the case, and not going to bother to look, its clearly a terrible business. The government look to have got a pretty good price in hindsight, despite all the howls of anguish from Labour at the time.

Labour has argued that the huge demand for Royal Mail shares shows that it is being undervalued and that taxpayers will be ripped off as a result. Chuka Umunna, the shadow business secretary, has called for the float to be halted on the grounds that the taxpayer could get a better deal.

Turns out Chuka knew sweet FA about what was true fair value for RMG, and neither did the IPO purchasers.

Source : https://www.theguardian.com/uk-news/2013/oct/07/royal-mail-ipo-shares-floatation

I have been saying for a long while that the pool of HYP shares is not very big.

Dod

Dod101 wrote:I have been saying for a long while that the pool of HYP shares is not very big.

Dod

I can't read from this particular share being a dog, to the above statement. There seems to be an awful load of steps missing in the argument


Arb.

This one looks horrible to my initial inspection. Large revenues, large costs, wafer thin margins. It should have an advantage, or moat, in its post office network, with the parcels business growing, but it's just hard to see how it can transform quickly enough against more nimble private sector competition.

I don't get the dividend change either. Cutting from 8p to 7.5p pleases nobody I would think and to me sends a signal of failure. Paying what it thinks it can get away with (cash flow looks bad too) but not quite as much as previously. To my mind either hold at 8p, to at least (semi) please income seekers, or cut to 4p (or less) and sell it as necessary to invest in the transformation from letters to parcels.

Ironically, the only thing that might warrant me looking closer is the pension situation. A large scheme, and in surplus too. The vale if any in here might take a while to "out", and I suspect poor market sentiment will be the short term driver, but the oil tanker might turn. I suspect I have got a lot of time to dig into this and time won't be a pressure.

dealtn wrote:This one looks horrible to my initial inspection. Large revenues, large costs, wafer thin margins. It should have an advantage, or moat, in its post office network, with the parcels business growing, but it's just hard to see how it can transform quickly enough against more nimble private sector competition.

I don't get the dividend change either. Cutting from 8p to 7.5p pleases nobody I would think and to me sends a signal of failure. Paying what it thinks it can get away with (cash flow looks bad too) but not quite as much as previously. To my mind either hold at 8p, to at least (semi) please income seekers, or cut to 4p (or less) and sell it as necessary to invest in the transformation from letters to parcels.

Ironically, the only thing that might warrant me looking closer is the pension situation. A large scheme, and in surplus too. The vale if any in here might take a while to "out", and I suspect poor market sentiment will be the short term driver, but the oil tanker might turn. I suspect I have got a lot of time to dig into this and time won't be a pressure.

If I read the announcement correctly they have cut the interim to 7.5p and will also cut the final to 7.5p, so the overall cut will be much bigger, from 25.0p (8.0p + 17.0p) to 15.0p (7.5p + 7.5p).

In the notes at the foot of the RNS:

5 On 22 May 2019, we announced that we were rebasing the dividend and changing the dividend policy. Reflective of the Board's confidence in the Group's updated strategy, strong balance sheet position and future cash generation, the Board committed to underpin an annual dividend at not less than 15.0 pence per share from 2019-20 to 2023-24. The Board would expect to pay an interim dividend each year equal to half of the annual dividend.

Anyway, if Comrade Corbyn gets his way, the problem of RMG will disappear since it is on his list for nationalisation. Just think of the lovely gilts you will get instead, issued by a country that will quickly be bankrupt. It matters very little what price will be placed on RMG because the gilts will be worth very little.

Dod

PinkDalek wrote:In the notes at the foot of the RNS:

5 On 22 May 2019, we announced that we were rebasing the dividend and changing the dividend policy. Reflective of the Board's confidence in the Group's updated strategy, strong balance sheet position and future cash generation, the Board committed to underpin an annual dividend at not less than 15.0 pence per share from 2019-20 to 2023-24. The Board would expect to pay an interim dividend each year equal to half of the annual dividend.

The preamble doesn't seem to herald a big reduction, quite the contrary, so do you think they meant to say "committed to underpin a final dividend" rather than annual dividend? If one takes it literally it could be as little as 7.5p plus 7.5p. Rather confusing.

Either way, it seems to be another dog and unlikely to recover.

Bouleversee wrote:The preamble doesn't seem to herald a big reduction, quite the contrary, so do you think they meant to say "committed to underpin a final dividend" rather than annual dividend? If one takes it literally it could be as little as 7.5p plus 7.5p. Rather confusing. ...

No they mean not less than 15p for the total annual dividend. Previous year total 25p (Interim 8p & Final 17p) as per Wizard's post and earlier.