Postal staff in the money as Royal Mail profits rocket

Royal Mail profits soared 116% to £702m in an “unprecedented” year as home shopping and the closure of the high street saw its services race back into fashion.

Chief executive Simon Thompson said: “Our people delivered”.

Royal Mail is paying a 10p dividend to investors, which include postal workers who own 8% of the shares. The divi is worth £100 million in total -- or about £60 to a postie who kept the 613 shares they received when the business was privatised.

The company shares have rallied lately, putting the company in a position to rejoin the FTSE 100.

The shares floated at 330p in a controversial stock market listing back in October 2013.

Today they opened at 525p.

Thompson added: “Last year stood out as one of remarkable change at Royal Mail. It has been challenging at times, but we have learnt that we can deliver results and change at lightning pace when we are united by a common purpose. From starting to deliver on Sundays through to trialling drones - We’re changing. And it’s working.”

Royal Mail managed to slash its debts from £1.1 billion to £457 million since cashflow was so strong.

Parcels, rather than letters, provided the bulk of revenue for the first time in the Mail’s history.

John Moore at Brewin Dolphin, said: “The group looks well placed to make a return to the FTSE 100; but, key to Royal Mail retaining that status will be maintaining the volume growth and innovation that have so heavily influenced today’s results.”

Richard Hunter, Head of Markets at interactive investor, said: “From here, Royal Mail is aware of the challenges which remain. The group will need to be alert to a particularly fierce level of competition in the parcels business, while it remains unclear how sustainable the current volumes are as customers have been driven to online shopping from their homes during the pandemic. At the same time, the effect on business volumes after the return to some kind of normality is also difficult to gauge, while hefty ongoing investment will be required to maintain progress so far.”