ROYAL Mail has taken another step towards flotation with the appointment of four banks to advise the UK government. It has been a keenly-fought contest for what will be one of the biggest listings of a company in London this year.
But this will not be a licence to print money as ministers have been keen to ensure those hired will be working on slim margins.
There is already enough controversy around the transition of the postal service into private hands without ministers being accused of lining the pockets of City fat cats.
There remains the possibility that the Royal Mail will be sold to a single buyer in a trade sale and with examples in Europe of postal services being run by private companies there would be no shortage of interested buyers. Business minister Michael Fallon said in his statement yesterday that there were other options, aside from flotation, available to the government.
But at this juncture, and with the government tempting unsupportive employees with the offer of free shares, it looks like the flotation process is unstoppable.
Golman Sachs and UBS will be joint global co-ordinators and bookrunners while Barclays and Bank of America Merrill Lynch will provide supporting roles, as predicted by Scotland on Sunday.
With the service licked into shape by the Canadian chief executive Moya Greene, who has tackled the big issues of costs and modernisation, the way seems clear for a £3 billion share issue in the autumn.
No dark clouds over Iomart’s rapid growth
One of the more successful Scottish technology companies in recent years has been Iomart which operates in the fast-growing cloud computing sector.
Iomart is benefiting as more firms outsource their data storage and operations. As such it has seen a sharp rise in revenue over the past three years when it first made a profit. Since that time pre-tax profits have shot up 970 per cent.
Management has been investing in infrastructure, including its fibre network and the rate of growth has given it the confidence to lift the dividend significantly.
The firm has been expanding also through acquisition, having bought three firms in the past year and stating an intention to acquire more.
Investors have followed the company’s progress by chasing up the shares and while they are now no longer cheap, the potential for more growth makes them attractive.
Rail bonuses leave bad taste for passengers
The latest bonus row, involving the directors of Network Rail, is another slap in the face for ordinary rail workers and passengers.
Reducing the level of bonuses paid from 60 per cent of salary to 17 per cent may look like an acknowledgement that some performance targets were not met, but the payments are still of a scale that would dwarf the pay of the average rail worker.
Chief executive Sir David Higgins will walk away with an extra £99,000 on top of his salary of £577,000 despite the fact that his organisation has received warnings from the Office of Rail Regulation about punctuality.
Payouts of this kind which smack of rewards for failure will not impress those commuters being forced year after year to pay ever increasing rail fares.