Buy back

[clashcityrocker]

Apparently Royal Mail has spent £100 million buying back shares (which are then cancelled)
They plan to spend another £100 buying back some more.

Can someone explain why.

[noggin1969]

https://www.investopedia.com/ask/answer ... shares.asp

[clashcityrocker]

So is it to:
1. Consolidate ownership
2. Because they believe the share price is undervalued or
3. Is it a quick fix for the financial statement?

The buyback is clearly designed to bolster the share price.
Is that to make it more attractive to investors or to make it less attractive to those that are shorting the company or those that might want to take it over?
I can't help feeling that something really important is going on and I don't understand what it is.

[plymouth3]

Why didn’t they do that at £1.27?
Cost us £300 million then

[noggin1969]

x

[JKSmudge]

A certain Eastern European owns around 20% of shares... RM need to get the price up to make any potential takeover less attractive to any predators.....

Top brass will not be happy re: the end of 'free' covid test kits

[clashcityrocker]

If the purpose of the buyback is to bolster the share price it is failing miserably.
And with each share cancelled Kretinsky's percentage holding increases.

[HTPostman]

Just a random wild thought, could RM do the share buy back with the intention of giving them to employees instead of a substantial pay rise? Eg sorry we can’t give you 8%, so here’s a hundred shares each and a 2% pay rise. Something doesn’t seem right about it all.

[clashcityrocker]

Just a random wild thought, could RM do the share buy back with the intention of giving them to employees instead of a substantial pay rise? Eg sorry we can’t give you 8%, so here’s a hundred shares each and a 2% pay rise. Something doesn’t seem right about it all.

As I understand it the bought back shares are being cancelled.

[HTPostman]

Just a random wild thought, could RM do the share buy back with the intention of giving them to employees instead of a substantial pay rise? Eg sorry we can’t give you 8%, so here’s a hundred shares each and a 2% pay rise. Something doesn’t seem right about it all.

As I understand it the bought back shares are being cancelled.

Ah right, blows my theory out of the water!

[clashcityrocker]

I think I remember reading that each 1% pay rise costs RM £100 million.
Martin Walsh says each hour off the working week costs them about £80 million.

Royal Mail has allocated £200 million to this buy back scheme.
That is either a 2% pay rise or the rest of the flight path to a 35 hour week.
Maybe Terry could remind them of that at the negotiations.

[POSTMAN]

Simon
Every 1% rise costs the business £40M+

[paulus103]

I must admit the buyback seems a bit weird to me

Normally companies do this as they have capital they can't do anything with
e.g. nothing to invest in by buying other companies or not investing in themselves to drive growth.

Royal Mail doesn't seem to fit e.g. we are investing money in parcel machines, electric vehicles etc.

And there is a looming pension change and a pay deal to negotiate

And we've already done a special dividend.

[Dindin]

Can i ask where the save as you earn shares come from?
Are these the phantom shares . Which explains the need for RM to cancel the £100 million worth of buy back shares?

[POSTMAN]

From memory, the SAYE shares are not allocated to you when you make your application but when the term ends, then you have to option to either buy the shares or just cash in the money.
Maybe someone else can clarify.