A major investor in postal giant Royal Mail Group (LON:RMG) has expressed anger at the management of the company, City A.M. has reported. The news marks another blow for the company, whose shares suffered a hefty selloff this week following a shock profit warning.
Royal Mail’s share price has been subdued in London this morning, having given up 0.53 percent to 359.60p as of 08:52 BST. The decline is largely in line with losses in the broader UK market, with the benchmark FTSE 100 index currently standing 0.61 percent lower at 7,464.79 points.
Royal Mail investor unhappy
City A.M. reported yesterday that a top 10 institutional shareholder in Royal Mail was unhappy with the postal operator’s management, and in particular its handling of the pension deal it struck with unions earlier this year.
“There is frustration as the pension deal with the unions was presented as a win-win situation, but what wasn’t appreciated fully was the level of disgruntlement amongst the workforce,” the investor told the newswire.
Russ Mould, an investment director for AJ Bell, told City A.M that the group’s boss Rico Back had inherited a tough situation from former boss Moya Greene and “will need to deliver on those cost and productivity goals if the issue of his own pay is not to resurface at some stage”.
Hedge funds sitting on paper profit
In a separate development, The Times reported that hedge funds were sitting on a paper profit worth tens of millions of pounds following this week’s sell-off in Royal Mail shares. The newspaper noted that according to filings with the Financial Conduct Authority and aggregated by Castellain Capital, six funds hold a combined 5.7 percent ‘short’ position in the postal operator. The short-sellers, which include BlackRock Investment Management and GLG Partners, are estimated to be sitting on paper profits in the region of £60 million.