Royal Mail Delivers A Sweet Surprise, To Pay One-Off Dividend Of 10p

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Summary

  • Encouraged by the pickup in letter volume and inline trading, Royal Mail Plc has announced to pay a one-off final dividend of 10 pence per share.
  • The company will also be updating about GLS business, charting out its medium-term targets.

Royal Mail Plc (LON: RMG) has joined the group of companies who have either reinstated the dividend or have announced a fresh dividend after the pandemic destabilised the businesses and the economy a year ago.

Royal Mail has come up with a pre-close announcement and update on General Logistics Systems (GLS) business. The group’s trading remains almost in line with the recently released updates, and the FY2020-21 operating profit is anticipated to be around £700 million.

After reviewing the group’s performance during FY2020-21, the board decided to pay a one-off final dividend of 10 pence per share.  All those shareholders who are on the register as of 30 July 2021 will be receiving dividend payment on 6 September 2021, though its subject to the consent of AGM. Further, with FY2020-21 results on 20 May, the board is likely to announce a new dividend policy for the group.

Later in the day, the company will also come up with an update on GLS business, charting out its medium-term goals, including a focus on International and Business-to-Consumer (B2C) as the major expansion plan, backed by the depth of the GLS network and business style.

For FY 2020-21, the adjusted operating profit of the GLS business is projected to be around £350 million (€390 million) and the adjusted operating profit margin is likely to be around 8.7 per cent.  From FY2019-20 to FY2024-25, the business expects to grow revenue at around 12 per cent CAGR.

(Source: Refinitiv, Thomson Reuters)

The stocks of the company were trading at GBX 519.90, up by 1.88 per cent at 10:07 AM GMT+1 on 30 March 2021. The market capitalisation of the stock stood at 5,100 million, while it has given a return of 53.98 per cent on a YTD basis.

 

Let us focus on some businesses which have recently restored their dividend payment:

Taylor Wimpey Plc

 

Taylor Wimpey Plc (LON: TW.), a household goods and home construction company, despite the challenging year 2020, posted an in line with expectations results. The company remains confident about the housing market and has even ramped up its land purchase since May 2020 to grab the opportunity to get high quality land at an attractive price. Though the operating profit of the company declined on the back of volume drop, but the board announced resumption of ordinary dividend payments in May 2021. To start with, the company will be paying the 2020 final dividend of 4.14 pence per share, aggregating to around £151 million, after getting shareholder approval at the AGM.

(Source: Refinitiv, Thomson Reuters)

The stocks of the company were trading at GBX 180.58, up by 0.47 per cent at 10:07 AM GMT+1 on 30 March 2021. The market capitalisation of the stock stood at 6,551.30 million, while it has given a return of 8.90 per cent on a YTD basis.

 

Kingfisher Plc

 

Kingfisher Plc (LON: KGF), one of the leading home improvement retailers, came up with a decent set of numbers for the year ended 31 January 2021. The company’s sales increased by 6.8 per cent on a constant currency to £12,343 million as compared to £11,513 million in the previous year; on a reported basis, the gains were a bit higher at 7.2 per cent. While the gross profit increased by 6.9 per cent on a constant currency basis, the Retail profit led by B&Q performance surged by 27.4 per cent. Most importantly, the company resumed the dividend payments and proposed a total dividend per share of 8.25 pence for FY 2020-21

(Source: Refinitiv, Thomson Reuters)

The stocks of the company were trading at GBX 324.30, up by 0.75 per cent at 10:07 AM GMT+1 on 30 March 2021. The market capitalisation of the stock stood at 6,796.88 million, while it has given a return of 20.08 per cent on a YTD basis.

 

  

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