Royal Mail Transformation Will Continue: Zonneveld

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Nov. 27 (Bloomberg) -- Gert Zonneveld, Director of Equity Research at Panmure Gordon, discusses the state of Royal Mail and if he feels vindicated by the company’s IPO performance. He speaks on Bloomberg Television's “The Pulse.” (Source: Bloomberg)


Numbers have gone up by over 17% to just over 300 million pounds which indicates the company is on the right track.

What do i make of the note from the firm that corporate clients are wary of the possibility of strike action?

It is not uncommon.

Corporate clients don't like uncertainty.

We see this in other areas such as airlines.

I am not overly concerned.

I am encouraged that the deadline has been extended which to me suggests they are very close to an agreement.

Talk about the ipo.

Do you feel vindicated or is it too early to say what the valuation is?

I am pleased at this stage.

I did stick my neck out to a certain extent suggesting the evaluation was over one billion higher than the official price range.

The market clearly value the company today.

There are considerable risks involved but overall, they have allowed the company to cope with these thoughts quite well.

One of the things that has emerged since the ipo is a significant portion of the investor base now held by hedge funds.

You can't speculate on what their intentions are, but the fact that if they are there does raise red flags.

I wouldn't use the words red flag, it suggests to me there are a number of hedge funds which find this an attractive investment proposition.

The company has been in state ownership.

The view must be that there are significant opportunities to drive further productivity improvements and enhanced value to shareholders.

Do you think that is going to sit side-by-side with a busted union base?

You have got -- placid unit base -- union base.

You have a unionized labor base which some say has not fully adapted in terms of productivity.

That is kind of what the hedge funds are going to shoot at.

What are we heading for?

I think we have to recognize that in order to change in the longer-term, which is something that royal mail has to achieve, in order to achieve those changes within the organization, they need to support -- the support of the unions.

It needs to be a partnership.

If you get too aggressive, you get the unions against you.

That backfires.

You need to tread very carefully to work with the unions while delivering on productivity.

Are we like to see these shares increasingly volatile?

The idea that it would be held by blue-chip investors that have long-term holdings -- that is not the case.

I think it is the case.

The vast majority of the ownership is still owned by traditional funds with a long- term view.

I don't share those concerns.

The company is sizable enough that we won't see massive volatility in share price.

It is cash generative.

I think it takes all the right boxes for many investors.

I don't suspect significant volatility.

Do they sense that you have had the bank for your buck?

The story is now in the rearview mirror?

It is a nice solid, stable holding that you can have -- so the fun and games are now done.

I think the key challenge is, a lot of the work is done but it may continue for years in terms of further productivity improvements.

I think the jury is out as to how a company can control those costs and manage productivity while achieving revenues.

How do you rate management?

They have got many challenges in front of them.

Is this the right management team?

I haven't met green yet.

She comes with a very good reputation.

Thank you very much indeed.

You must feel vindicated.

Gert zonneveld joining us.

Francine, over to you.

This is what we are talking about -- the companies we need to keep an eye on as well, it agreed to sell its dominican republic unit for $1.4 billion.

Completion of the deal is subject to approval from dominican authorities.

Billionaire investor could become vivendi chairman.

He will replace the men who led the company from within a decade.

Bollore will take over when vivendi completes its telecom business.

Sony is seeking a u.s. patent for smart big hairpieces that could help navigate routes, check what pressure, etc.

It would communicate wirelessly

This text has been automatically generated. It may not be 100% accurate.


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