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Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, administrative costs, withholding taxes and different accounting and reporting standards. You should not invest any money you cannot afford to lose, and you should not rely on any dividend income to meet your living expenses. The value of stocks, shares and any dividend income may fall as well as rise and is not guaranteed, so you may get back less than you invested. No liability is accepted by the author, The Motley Fool Ltd or Richdale Brokers and Financial Services Ltd for any loss or detriment experienced by any individual from any decision, whether consequent to, or in any way related to the content provided by The Motley Fool Ltd the provision of which is an unregulated activity. If you require any personal advice or recommendations, please speak to an independent qualified financial adviser. No content should be relied upon as constituting personal advice or a personal recommendation, when making your decisions. The content provided has not taken into account the particular circumstances of any specific individual or group of individuals and does not constitute personal advice or a personal recommendation. Any opinions expressed are the opinions of the authors only. We have taken reasonable steps to ensure that any information provided by The Motley Fool Ltd, is accurate at the time of publishing. Although it does look undervalued, I’m going to stay away until there’s more clarity on the situation. The share price is down 45% over the past year. The reputational damage, financial implications and distraction from core operations that this causes is all negative. As a result, I’m worried about Royal Mail shares. With the case of Royal Mail, I don’t think a resolution is going to come anytime soon. Ideally, a smooth working relationship between the union and the management of the company is achieved. It’s a great thing to be able to be a part of, to ensure that people are treated fairly. There’s no problem with a union pushing for the rights of workers. So the strategy clash between two stakeholders here could paralyse Royal Mail if neither side gives in to what it believes to be the right direction for the future. As I flagged up last month, the Q1 revenue drop of 11.5% can be partly contributed to the structural decline of letters. It would need to find a way to either cut costs somewhere else or increase revenue in order to offset this impact on the company accounts.Īs for the push on letters, this goes against the transition that the business is making towards the parcel division. Not only would this be an expense for 2022, but the higher pay would reflect as a cost for each year going forward. It’s also pushing for a strategy to increase the focus on letters.Ī jump in pay of this size would cost a lot for Royal Mail. The Communication Workers Union is requesting a pay rise in line with inflation. This situation has been escalating for a while now and is one reason why the share price is down 11% over the past three months. Having friction between unions and management isn’t in anyone’s interests. In my opinion, the reputational damage in coming weeks could be worse than the financial hit.











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