Yahoo Finance Royal Mail delivers pandemic payout to shareholders
Royal Mail is rewarding investors with a pandemic payout after booming parcel deliveries sparked a dramatic turnaround in its fortunes.
The FTSE 250 company, whose share price has quadrupled over the past year, announced a “one-off” dividend of 10p a share for its legions of retail backers, who include thousands of staff.
It is a major turnaround after the postal monopoly was plunged into crisis last May, when chief executive Rico Back stepped down after the pandemic accelerated the decline in demand to post letters.
Chairman Keith Williams took over in the interim and introduced a series of changes including greater automation of sorting. The former British Airways boss also soothed tensions with union leaders by striking a new deal on pay and working conditions.
Although letter deliveries have not recovered, parcel volumes surged due to online shopping during the pandemic - particularly in the run-up to Christmas. This trend has continued into the New Year.
Annual profit is now expected to be about £700m.
The dramatic change in Royal Mail’s fortunes has paid off handsomely for billionaire investor Daniel Kretinsky.
Known as the “Czech sphinx” because of his inscrutable nature, Mr Kretinsky’s 15pc stake in Royal Mail is now worth an estimated £750m. He is also one of the biggest shareholders in Sainsbury's.
However, Royal Mail’s overseas arm GLS remains the company’s key profit generator however.
It expects 12pc growth in revenue and to double operating profit to €500m (£430m).
The company will provide an update on its dividend policy in May.
Shares rose 2pc to 520p. The stock was trading at 126p this time last year in the wake of the widespread market selloff.
