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Valuation Royal Mail Plc

Autor:   •  September 24, 2015  •  Coursework  •  8,584 Words (35 Pages)  •  1,354 Views

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Table of Contents

  1. Executive Summary

3

  1. About Royal Mail plc
  1. Company Overview

4

  1. Strategic Transformation

5

  1. SWOT Analysis

8

  1. Industry Analysis
  1. UK Letters & Mail Market

9

  1. UK Parcel Market

11

  1. European Parcel Market

13

  1. Accounting Analysis and Policies

15

  1. Financial Analysis

17

  1. Forecasting and Pro-Forma Financial Statements
  1. Segment Assumptions - UKPIL Letters & Mail

19

  1. Segment Assumptions - UKPIL Parcels

20

  1. Segment Assumptions - GLS Parcels

21

  1. Balance Sheet Assumptions

22

  1. Income Statement Assumptions

22

  1. Pro-forma Financial Statements

23

  1. DCF Valuation
  1. Weighted Average Cost of Capital

24

  1. Valuation Results

26

  1. Sensitivity Tests

27

  1. Relative Valuation

28

Appendix 1: USP Regulatory Framework

30

Appendix 2: UKPIL Parcel Delivery Services

32

Appendix 3: Determining WACC: Regression

33


1. Executive Summary

Our group performed a valuation analysis of Royal Mail plc (“RM”).  This company was privatized and listed on the London Stock Exchange in October 2013 with the ticker RMG:LN.  In order to cope with the structural decline in its traditional postal business, RM embarked on a long-term plan to transform its business to focus on higher growth parcel deliveries.  Although its transformation efforts have led significant improvements in productivity and lower of costs in recent years, we believe that future cost reductions will be limited.  With increasing competition in all of RM’s key business segments, we expect revenue growth to be under pressure and margins to be squeezed in the near term.  

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