Royal Mail profit surge leads to special dividend for shareholders

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.

Tuesday, 30th March 2021, 8:26 am
Updated Tuesday, 30th March 2021, 8:28 am
Royal Mail has seen a large surge in customers posting letters and using its services during the most recent lockdown.

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 £99 million on September 6.

Bosses expect revenues to grow by around 12% a year for the next five years, hitting operating profits of 500 million euros (£426.6 million) and generating free cash flow of more than one billion euros (£850 million).

Adjusted operating profits in the Amsterdam-based division are expected to be around £350 million in the current financial year, the company added.

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The plans follow a profit upgrade announced earlier this month, with bosses revealing adjusted operating profits are expected to be around £700 million – up from £325 million 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, costing around £90 million instead of an original estimate of £140 million.

Royal Mail revenues are set to be £900 million higher than last year – at around £8.6 billion.

New 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 in May.