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The Markets
by Proactive
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The Markets
by Proactive
Proactive UK has moved.
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Business & education services

Pension uncertainty overshadows Royal Mail

After results ten days ago, Deutsche Bank has trimmed its target price to 435p from 450p.

Like a second class letter, Royal Mail Group PLC (LON:RMG) updates keep arriving later than expected.

After results ten days ago, Deutsche Bank has trimmed its target price to 435p from 450p.

On trading, Royal Mail has to contend with a weak macro-economic backdrop, letters in decline and rising wages.

Management is positioning RMG for as much growth as possible (through the GLS arm) and continues to streamline costs.

Clarity over the pension scheme though is key for the German broker, which is costing £350mln each year and might rise to £1.4bn annually.

Until this pension issue is resolved, a 'hold' says the broker.

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