Essay About Pic And Pro-Forma Financial Statementssegment Assumptions

Valuation Royal Mail Plc
[pic 1][pic 2]Table of ContentsExecutive Summary3About Royal Mail plcCompany Overview4Strategic Transformation5SWOT Analysis8Industry AnalysisUK Letters & Mail Market9UK Parcel Market11European Parcel Market13Accounting Analysis and Policies15Financial Analysis17Forecasting and Pro-Forma Financial StatementsSegment Assumptions – UKPIL Letters & Mail 19Segment Assumptions – UKPIL Parcels 20Segment Assumptions – GLS Parcels 21Balance Sheet Assumptions 22Income Statement Assumptions 22Pro-forma Financial Statements23DCF ValuationWeighted Average Cost of Capital24Valuation Results26Sensitivity Tests27Relative Valuation28Appendix 1: USP Regulatory Framework30 Appendix 2: UKPIL Parcel Delivery Services32Appendix 3: Determining WACC: Regression331. Executive SummaryOur group performed a valuation analysis of Royal Mail plc (“RM”).  This company was privatized and listed on the London Stock Exchange in October 2013 with the ticker RMG:LN.  In order to cope with the structural decline in its traditional postal business, RM embarked on a long-term plan to transform its business to focus on higher growth parcel deliveries.  Although its transformation efforts have led significant improvements in productivity and lower of costs in recent years, we believe that future cost reductions will be limited.  With increasing competition in all of RM’s key business segments, we expect revenue growth to be under pressure and margins to be squeezed in the near term.