Royal Mail bosses plan special dividend as lockdown sales surge
BOSSES AT Royal Mail have announced they expect to pay a special dividend of 10p a share to hand out surging profits made during the global pandemic.
The former state-owned mail service said the board has reviewed the performance of the past 12 months and is likely to make the payment of around £99m on September 6.
Royal Mail suspended the dividend during the pandemic to manage any possible fallout and hit to the business, with the last payment to shareholders an interim dividend of 7.5p made in January 2020.
But strong sales meant bosses could announce the new one-off dividend for the full year.
The company said it would announce a new dividend policy in May.
Shareholders welcomed the news of a resumption of the dividend, with shares opening up nearly 2 per cent in early trading at 520p.
Bosses expect revenues to grow by around 12 per cent a year for the next five years, hitting operating profits of 500 million euros (£426.6m) and generating free cash flow of more than one billion euros (£850m).
Adjusted operating profits in the Amsterdam-based division are expected to be around £350m in the current financial year, the company added.
The plans follow a profit upgrade announced earlier this month, with bosses revealing adjusted operating profits are expected to be around £700m – up from £325m a year ago.
Royal Mail announced at the time that it had seen a large surge in customers posting letters and using its services during the most recent lockdown. The cost of a major restructuring is also expected to come in below expectations.
Royal Mail revenues are set to be £900m higher than last year – at around £8.6bn.
Richard Hunter of interactive investor, commented: “The astonishing reversal of fortunes at Royal Mail continues as the momentum of bumper Christmas trading has spilled over into the new year.”
The astonishing reversal of fortunes at Royal Mail continues. Richard Hunter, Head of Markets at interactive investor