An analyst with a rare stamp of authority : at least on RM

[the deliverer]

The Observer, Sunday 16 November 2014 by Simon Goodley

An analyst with a rare stamp of authority – at least on Royal Mail

Gert Zonneveld’s valuation of the postal service was a lot better than the coalition’s. Now he wonders what its property is worth

Some 13 months ago, as the Royal Mail was preparing to float, a little known financial analyst suddenly became a star (at least in City terms).

Panmure Gordon’s Gert Zonneveld was the first independent number cruncher to put a value on the postal service, which he argued at the time was worth £3.7bn-£4.5bn (against the official guess of £2.6bn-£3.3bn).

As we now know, the business floated at £3.3bn and soared to £6bn – meaning that the government stood accused of gifting it to a bunch of spivs. It’s now worth £4.7bn – leaving Zonneveld as a City rarity who might actually know what he’s talking about.

So, as we await the Royal Mail’s results this week, what’s his current view? There’s been bad news (deterioration in the parcels market and a more competitive sector) but on the plus side Royal Mail’s recent £111m disposal of its Paddington property suggests plenty of upside for other sites on the block. “Originally people asked: ‘Why wasn’t there a deal done to allow an element of the [property] proceeds to flow back to the state?’,” he muses. “It was said at the time that [the sites] weren’t worth that much. They were worth quite a lot more than expected.”

He predicts this issue may gather momentum, and it’s tempting to listen to him. When it comes to second-guessing Royal Mail, Zonneveld has a track record of delivery.