Author: Archive

Deutsche Post sees 2006 EBIT at least 3.7 bln eur vs 3.755 bln yr-earlier

Posted by | Mar 14, 2006 | |

Deutsche Post AG said its 2006 EBIT will reach at least 3.7 bln eur, down from 3.755 bln eur last year due to stagnating sales at its mail division.

It said sales will exceed 60 bln eur this year, up from 44.594 bln eur.

The German mail carrier will pay out a 2005 dividend of 0.70 eur per share, up from 0.50 eur the year earlier.

Deutsche Post said the Mail division’s EBIT will remain stable at 2.0 bln eur.

At the Express division, EBIT is expected to reach 445 mln eur before impairment charges.

The Logistics division is expected to post a profit of around 500 mln eur, while Financial Services’ EBIT will reach at least 900 mln eur.

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Royal Mail UK rival objects to 'unfair state aid'

Posted by | Mar 14, 2006 | |

TNT Mail has intensified its campaign against the state-owned postal operator’s request for Pounds 2bn of government money, writing to MPs to argue the funding would constitute “unfair state aid”. The lobbying comes as parallel negotiations by Royal Mail with the government, its sole shareholder, and Postcomm, its regulator, near their climax. Royal Mail’s board will meet today to discuss its response to Postcomm’s latest version of proposed four-year price controls, which will allow the cost of a first-class stamp to rise from 30p to at least 36p by 2010. TNT Mail yesterday accused Royal Mail of using “11th hour brinkmanship” in its attempts to leverage the maximum amount from both ministers and Postcomm. In a letter sent to the main opposition parties, as well as MPs on the trade and industry and public accounts committees, TNT Mail said Royal Mail was profitable and a Pounds 2bn investment would be an “inappropriate and inefficient use of taxpayers’ money”. It argued that the Pounds 2bn would also “greatly distort” the postal services market. “Fractions of one penny influence the buying decisions of business mailers who are responsible for 85 per cent of the UK’s mail,” the letter said.

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UPS – potential share buy back and strategic acquisition scenarios

Posted by | Mar 13, 2006 | |

Can UPS unlock shareholder value?

UPS’ stock continues to lag. UPS’ stock is up 11% since 2000, compared to 209%, 174% and -13% on average for the rest of our transport sector, closest comparable FDX and the S&P 500, during that period. Year-to-date UPS is up 2% versus our transport sector, FDX and the S&P 500 up 7%, 9% and 2%.
Why has UPS’ stock underperformed its transport peers? We are not sure but suspect it is a combination of beginning in C99 with too rich a valuation (it has seen steady multiple contraction from near 30x to current 20x forward P/E), a lack of operating leverage during a strong economy, and an increasing sense that there is little value for UPS to unlock with its enormous FCF generation.
We sense mgmt is strongly considering using the BS. Management has recently publicly noted that UPS’ balance sheet is over capitalized and that it is not opposed to taking on greater leverage. We suspect they are increasingly frustrated with the stock performance, and we believe either a large strategic acquisition or a material share repurchase is increasingly likely.
Strategic acquisition seems most accretive. Below in this note we take a look at several scenarios from UPS levering up its balance sheet to 30%-50% debt to total cap. (2%-4% EPS accretive) by repurchasing stock to purchasing TNT to other large international forwarder acquisitions. Because of UPS’ massive size and share count none of these scenarios are massively accretive to earnings or returns.
Retain Peer Perform rating. We are more constructive on UPS’ stock than we have been over the past 12-15 months given our sense of stabilizing relative domestic pricing competitiveness. However, we continue to see cost headwinds during C06 for UPS and believe margins may be at or close to peak. Our analysis indicates a large shareholder event if it occurs is not likely game changing.
P:LibraryUPSUPS Potential_Buyback_Acqs 0306.pdf

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Poste Italiane Renews Contract With MoneyGram

Posted by | Mar 13, 2006 | |

MoneyGram, a leading provider of global money transfer service, has announced that Poste Italiane, the Italian Post Office, has renewed a multi-year agreement with the company. Poste Italiane is a major agent for MoneyGram in Italy.

Poste Italiane first began offering MoneyGram’s money transfer service in 2001. The service is now available in more than 9,000 locations and Poste Italiane plans to make it available in another 4,000 post office locations across the country.

“This renewed agreement underlines Poste Italiane’s attention to urgent money transfer,” said Marco Siracusan, marketing director, BancoPosta Division of Poste Italiane. “We are working with MoneyGram, focusing on activities customized to immigrants. Together we are planning different marketing strategies targeted to specific ethnic groups.”

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TNT announces exercise of option right by Italian joint-venture partner

Posted by | Mar 13, 2006 | |

TNT announces that the minority shareholder in its Italian joint venture TNT Arvil, Ecotras SRL of Milan, has given notice of the exercise of its option. Under this option Ecotras had the right to sell its 49% shareholding in TNT Arvil to TNT Logistics Holding Italy SRL. After transfer of the shares TNT Logistics Holding Italy SRL will hold all shares in TNT Arvil.

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Royal Mail row delays finance deal

Posted by | Mar 11, 2006 | |

Sharp differences between the Royal Mail and ministers over the postal operator’s business plans have spilt into the open, hampering talks over whether to pour more than Pounds 1bn of public money into the state-owned company. The Department of Trade and Industry believes Allan Leighton, Royal Mail chairman, needs to produce a firmer, more detailed and more credible business strategy before the government can agree to provide any financing.
There is uncertainty over the detail of the postal operator’s plan to give employees a stake in the company, a scheme that has been touted by Mr Leighton but which is opposed by the postal workers’ union and many Labour MPs. Ministers have made clear they are still waiting to see a well-argued case that the scheme would boost productivity. Yesterday, the DTI confirmed there had been “exploratory talks” about the share scheme but added that it had “not received robust or firm proposals on (it) as yet”. However, Royal Mail re-jected the suggestion that its proposals lacked detail and robustness. “We have submitted a very detailed, well-argued case for investment in the company, which is still with the government,” the company said. “The employee share scheme is an integral part of the case.”

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Posten 2005 year-end report

Posted by | Mar 10, 2006 | |

Net sales totaled SEK 25,277m (25,120)
Operating earnings totaled SEK 1,281m (1,115). Last year’s operating earnings included capital gains of SEK 206m
After-tax earnings totaled SEK 1,478m (1,297)
Equity-assets ratio was 33 percent (25)
Cash flows from operating activities totaled SEK 2,251m (1,753)

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3i leads the race for GBP 210 million logistics group

Posted by | Mar 10, 2006 | |

Private equity firm 3i is poised to acquire niche logistics company Marken from Deutsche Post for about GBP210m (EUR306 million). Sources said 3i is now in exclusive talks with Deutsche Post advisers UBS to buy Marken, part of Exel, after submitting a higher bid than rival contenders. Marken provides specialist courier services to the medical, pharmaceutical, media, professional, fashion and high technology industries. It is not clear why Deutsche Post and Exel have decided to offload Marken.

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