May 22, 2019

Royal Mail to cut dividend as it plans £1.8bn investment programme

Royal Mail is to cut its dividend as it invests £1.8bn in the postal service over five years as part of a turnround plan aimed at securing the future of the 500-year-old organisation. The FTSE 250 company said that from next year it would set a basic payout of 15p per share - a drop from this year's total dividend of 25p. The decision will come as a huge blow to Royal Mail's many retail investors who share in its £240m dividend pot and have benefited from its previous policy of "Progressive" or rising payouts over time. A damaging profit warning last year after Royal Mail missed productivity and cost savings targets sank share its price by almost one-fifth. Royal Mail's preferred earnings metric, which strips out expenses from a long-running modernisation programme, came in lower than year last. Operating profit before transformation costs slumped more than a quarter to £509m. Management recommended a final dividend of 17p, giving the full-year payout of 25p. It said that the "Rebased" dividend from next year could be supplemented by additional payouts in years with "Substantial excess cash flow".

Read the full story

 Related companies

Make a complaint about Royal Mail by viewing their customer service contacts.