Deutsche Post, TPG, Hays winners in mail deregulation

In a note on the European mail sector after UK regulator Postcomm announced plans to introduce “serious” competition to the UK market, ABN Amro said Deutsche Post World Net AG, TPG NV and Hays PLC stand to benefit particularly from increasing liberalisation, dealers said. The broker said that Postcomm’s move represents not only a significant opportunity for these companies, but also shifts the balance in favour of wider EU liberalisation. Analysts said that the mail sector is often overlooked by investors, but should produce EBITA in excess of 2.9 bln eur for TPG, Deutsche Post and Hays collectively. Of the three players, TPG stands to benefit the most from wider UK/EU liberalisation, the broker said, adding that mail operations are expected to account for 65 pct of this year’s profits. Meanwhile, the broker said mail is also highly critical to the fortunes of Deutsche Post, forecasting that mail services are are expected to account for 75 pct of its earnings. Although mail services are nothing like as important to Hays as they are to the other two players, the broker stressed that taking a one-sided view of its status as a recruitment group was to overlook the significant potential in this area. Analysts said that Hays is the only sizeable existing rival to Consignia in the UK. At 3.09 pm in London, Hays shares were up 5-3/4 pence at 192-3/4, while TPG shares were 0.18 eur higher at 24.08 and Deutsche Post shares were 0.19 eur lower at 14.85. lh/jsa