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Royal Mail: return to sender

Frustrated by trade-union resistance, the courier group has been slow to adapt to the new postal landscape and its turnaround prospects look poor
Royal Mail: return to sender

Its roots date back to the 1500s when Henry VIII established the ‘Master of the Posts’, but Royal Mail (RMG) has failed to deliver a majestic return for investors. When its shares were listed in 2013, a potential growth story was on offer – after years of public ownership, there was scope to remove inefficiencies, boost profit margins and shift to parcel delivery as e-commerce took flight. But progress has been painstakingly slow, and the shares are down more than two-fifths from their 330p flotation price.

IC TIP: Sell at 184p
Tip style
Sell
Risk rating
High
Timescale
Long Term
Bull points

More resilient international operations

Potential takeover target

Bear points

Structural decline in letters market

Slow shift to parcels and increasing competition

Perpetual labour issues

High short-selling interest

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