marktime1231
20 Feb 2020
Thoughts on DS Smith? SMDS enjoyed a 10p kick up this morning, actually more like the brakes holding back the sp were released a little, as the company confirmed that its Plastics division sale to Olympus Partners was … er still not complete. The long wait caused by a delay of approval from the US Dept of Justice (what on earth has it got to do with them) now overcome but it still needs US federal court approval (what on earth has it got to do with them). And it still needs the two parties to complete the transaction and Olympus still need to handover the approx. $400M so SMDS can settle some of its debt. I guess the sp response is some relief that the deal does look to be going ahead and may yet complete before year end.
Eadwig
07 Feb 2020
Thoughts on DS Smith? marktime1231: But RMG does have ambition to compete in the global parcel delivery market, and this is its fastest growing segment. It certainly seems that way and I wish them every luck. I believe they’ll need it.
marktime1231
07 Feb 2020
Thoughts on DS Smith? Not sure how RMG could compete with those companies on a global scale either, astonishing pictures. On the other hand … “The Royal Mail’s General Logistics Systems is creating its own air express delivery service, Rico Back, the head of GLS, told Handelsblatt. Back said the company will invest 10 mln eur in GLS Air this year and that its two aircraft will fly between the company’s delivery centres in Germany and the UK from October. Ultimately, GLS Air wants to have a fleet of 25 aircraft that will fly to 17 European nations, he added. GLS is the continental European counterpart to Royal Mail’s UK-based Parcelforce Worldwide. It is based in the Netherlands and has 14,500 staff.†That is the RMG international parcels business which grew 11% in 2019. And this article quote is from 2006 … er, 14 years ago. Rico Back is now the boss of all RMG, not just GLS, which tells you where RMG want to be … cutting dividends, investing in UK and global parcels service … this is what he said in 2019< “Chief Executive Rico Back told Reuters it would seek to earn 40% of revenue from its operations outside Britain and 70% from parcel deliveries by the end of the five-year period. … He said the company’s priorities over the next five years include growing in the UK and expanding its General Logistics Systems (GLS) unit into parcels from one country to another … Cross-border parcels currently account for around 20% of GLS’ revenue and the unit will enter the small parcel market, working with Royal Mail International to improve its export offering to Europe and North America …†I believe RMG have an air hub at East Midlands airport alongside UPS and DHL, but probably not operating its own mega air fleet, nothing like the others anyway. But RMG does have ambition to compete in the global parcel delivery market, and this is its fastest growing segment.
Eadwig
06 Feb 2020
Thoughts on DS Smith? marktime1231: which nationwide scaled up parcel delivery business listed in the UK is a better option would you say? I spend a lot of my time in Poland and all parcel deliveries are made by private companies such as FedEx, DHL, UPS and others. You can’t look at a busy street during the day and not see vehicles from at least one of these companies. The post office doesn’t deliver parcels, it delivers a note asking you to go to the post office and pick up a parcel. The last time I tried to send a smallish parcel in the UK, the post office told me it was too large for their system. They showed me the max size of parcel and it was very limited indeed. It was based on size, not weight, which surprised me. The real question is though can you see Royal Mail building its own fleet of hundreds of jets to properly compete with the likes of FedEx? I can’t see it myself. They’d never get airport capacity for a start. Not in this country anyway. DHL expanding their own airport hub in Europe and here is their main hub at East Midlands Royal mail has a few planes, but they aren’t in the same league as these boys.
marktime1231
06 Feb 2020
Thoughts on DS Smith? The sector outlook is good, that is why we are investing in SMDS. RMG has its own specific problems … letters, unions … but don’t forget it provides the national backbone and the last mile for much of the e-commerce in the UK. Otherwise its parcels and global logistics businesses are ok. Not popular at the moment, but where else do you place your bet … which nationwide scaled up parcel delivery business listed in the UK is a better option would you say? I think we have sold off all the alternatives (who were they again … ) into European or US ownership. UPS, DHL, TNT, FedEx, DPD, Hermes … is there still a City Sprint, UK Mail, Yodel? Does Amazon have its own logistics backbone here, but using someone else for last-mile? So we are left with APC … are they private … Tuffnells, part of Connect and struggling, and DX who are recovering from the collapse of demand for legal document courier services. I have backed all three … CNCT, DX, RMG … in the hope one or more of them will come good.
Eadwig
06 Feb 2020
Thoughts on DS Smith? marktime1231: But surely the long view on this business (sector) must be strongly positive. I dunno, its certainly not positive on RMG. Isn’t the main reason their share price is down that they’ve sold off most of their main assets (land) by now? Clearly they’re never going to compete with the likes of Fed Ex … I’ve never seen any future for them, I must admit.
marktime1231
06 Feb 2020
Thoughts on DS Smith? RMG report a 3% growth in parcels volume over Christmas, a further sign that there has been solid but not spectacular growth in the logistics / fulfilment sector. Very surprised that RMG is sharply off today, not a reaction to business performance but to a renewed threat of a postal strike. The cries of selling off Royal Mail on the cheap at 330p have disappeared now the sp has slipped to 175p. (Actually that looks really cheap to me with business “broadly in line†and a proposed dividend yield of 8.5%.) How well SMDS captures the opportunities is key, can it compete with its main rivals for share and still turn in good earnings. It is worrying that we still have not had confirmation that the sale of the Plastics division has completed - I wonder if proposed global restrictions on the export of plastics for “recycling†has damaged the deal. But surely the long view on this business (sector) must be strongly positive.
Eadwig
06 Feb 2020
Thoughts on DS Smith? I added some last week, I just realised this morning… Added a tranche on 27 Jan @344p. Average holding on two tranches now UP to @334.47p
marktime1231
05 Feb 2020
Thoughts on DS Smith? Sector up this morning thanks to positive news from SKG announcing a dividend hike, saying its cardboard business growth was about 4% driven mostly by the Americas. Can SMDS do better than that?
marktime1231
03 Feb 2020
Thoughts on DS Smith? Added a second chunk at 343p this morning.
marktime1231
02 Feb 2020
Thoughts on DS Smith? Despite global markets in turmoil over Wuhan Flu, I am hoping SMDS will bounce back well. Amazon results last week said sales were up 21% a growth rate it hopes to sustain, so it must be using shed loads more cardboard. Might even look to add if the sp remains depressed.
marktime1231
21 Jan 2020
Thoughts on DS Smith? Tra la!. A first tranche bought in the dip this morning at 355p.
marktime1231
20 Jan 2020
Thoughts on DS Smith? I have put a bid in for a first tranche at 356p but I am not confident it will find a match, there was pretty strong demand late today so we might have seen the last of the bargain price. Fingers crossed.
Eadwig
20 Jan 2020
Thoughts on DS Smith? Bought a tranche @357p after costs this morning. After applying profits from the previous sale, which I’ve held over in order to build a position, I now have a single tranche holding at an average of @321p. (At this price I estimate a forward yield of approx 5.4%) I will add a 2nd tranche if it drops further although that will raise my average holding price (or sell if we see a similar rise from this level to near @400p as per my last purchase.
Eadwig
20 Jan 2020
Thoughts on DS Smith? marktime1231: I see three shorters with 2.90% against SMDS not including unreported small positions. Oh yes! Thanks for pointing that out. When doing a company search I’m getting a result of zero, something amiss there. However, 2.9% is still a relatively small overall position. Amazon have “100% recycled material†on the special boxes they use for delivering books and DVDs (if anyone still buys the latter), or did last time I saw such a thing. I have some stacked away somewhere for re-selling second hand books myself at my flat in Sheffield, I’ll try to remember to double check this when I’m over there next weekend. marktime1231: I wonder who consumes even more cardboard than Amazon … McDonalds, KFC, Ikea? Ikea is an interesting one. The size of their packaged stuff must certainly put them in the running. McDonalds have never used much for burgers because they used to use styrofoam instead. I noted recently they now wrap them in paper only and put them in a paper bag. I doubt many of those bags end up being recycled. Some of their newer product lines (wraps and so on) come in cardboard and of course the soft drink cups alone (with plastic tops and straws) must score heavily against them. I can’t immediately think of a way for them to solve that, let alone an economic way. They also hand out little plastic wraps of ketchup and the like by the million (at a guess) each day, whereas in the USA if you eat indoors there are dispensers for ketchup saving on wrapping. Last visit to a McD in Poland the same plastic wraps were given out even to those eating on the premises. I believe those ketchup wraps are produced in a factory in Lincolnshire for the whole of Europe, by the way. I can see that moving out to within the EU if exporting them attracts a tariff in future. Ironically, my understanding is the factory is manned by around 50% EU workers. They could end up doing the same job in Eastern Europe for half the wages.
