Royal returns: Is there value in Royal Mail?

UK EQUITIES

George Godber, manager of the CF Miton UK Value Opportunities fund, analyses whether there is any value in Royal Mail following its stellar 2013 IPO.

The Royal Mail flotation was the highest profile stock market event of 2013. Like London 2012, many people applied, but only a few investors were lucky enough to get tickets for the opening ceremony. The shares have been very strong since its IPO, rising by more than 80% and, as a result, many question whether there can be any value left in the company. However, analysis of the operational trends, balance sheet strength and cashflow potential would suggest this is a business with fascinating prospects. A business transformed Operationally, the management, working closely wit...