Royal Mail to make one-off £99m payout

ROYAL MAIL bosses will make a one-off special payment to shareholders after profits surged with demand during the pandemic and subsequent lockdowns.

The company’s board has reviewed performance during the past 12 months and is likely to make the 10p per share payment – totalling around £99million – on September 6.

Royal Mail had suspended the dividend so it could manage any fallout from the coronavirus crisis with the last payment in January 2020.

But strong sales mean revenues are set to be £900million higher than last year – at around £8.6billion.

The latest dividend plans follow a profit upgrade announced earlier this month, with adjusted operating profits expected to be around £700 million – up from £325million a year ago.

Royal Mail has announced that it had seen a large surge in customers posting letters and using its services during the most recent lockdown.

A major restructuring is also expected to come in below expectations, at around £90million instead of £140million.

Hargreaves Lansdown analyst Nicholas Heyett said: ‘A bumper Christmas is no surprise in a world where most shops are restricted to online sales and physically giving a gift to a friend or family member is illegal in many cases.

‘The subsequent upgrade in full year operating profit guidance is far more important, since it’s based on a very good set of numbers from January and February.’

The company’s logistics business, GLS, expects revenues to grow by around 12 per cent a year for the next five years, with adjusted operating profits in the Amsterdam-based division this year expected to be around £350million.

Royal Mail chief executive Simon Thompson, who joined in January after a stint as the boss of the NHS Test and Trace app, will give a fuller update on the group’s performance on May 20.