(Reuters) – Royal Mail Plc said on Wednesday it was slashing its dividend by 40% and would invest a further 1.8 billion pounds in its UK postal service over the next five years in the hope of turning the business around.
The former British monopoly, which has struggled with changes in postal and courier services over the past decade, said it would pay an annual dividend of 15 pence per share in 2019-20, compared with the 25 pence paid in 2018-19.
Privatised in 2013, Royal Mail has been reviewing operations and testing new delivery methods as it adapts to the move away from physical letters in favour of digital communications.
“Our ambition is to build a parcels-led, more balanced and more diversified international business,” Chief Executive Rico Back said, adding that scaling up its General Logistics Systems business was a key priority.
The company’s annual results showed that revenue at GLS, its ground-based parcel network, rose 8%, but adjusted operating profit slipped 9%.
It also forecast adjusted operating profit after certain costs of 300 million pounds to 340 million pounds for 2019-20, much lower than the 411 million pounds reported for the year to March 31.
(Reporting by Shashwat Awasthi in Bengaluru; editing by Gopakumar Warrier)