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Whistl woes boost Royal Mail

Royal Mail (RMG) shares rose this week after one of its competitors announced trading difficulties and staff redundancies.
May 14, 2015

Shares in Royal Mail (RMG) hit their highest value since June 2014 this week as one its competitors Whistl - formerly known as TNT Post - suspended its door-to-door delivery service in London, Liverpool and Manchester, putting 2,000 jobs at risk. The decision to halt services came after the firm's investment partner LDC, a division of Lloyds Banking Group (LLOY), refused to fund the group’s expansion plans.

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While Whistl will continue to provide some services, it admitted it would have to call on Royal Mail to help about and absorb extra deliveries. Shares in Royal Mail jumped more than 3 per cent in reaction. In the past, bosses at Royal Mail have complained about the group's status as the 'universal service provider'. It claims competitors have an unfair advantage because they don't have to deliver nationwide for a set price.

Clearly, Royal Mail will see this as an opportunity to buck up volumes and, hopefully, revenues. The recently privatised firm said it was working closely with Whistl to ensure customers were not negatively affected by the switch in couriers.