Royal Mail Group Finals.

[idpickering]

FINANCIAL REPORT FOR THE FULL YEAR ENDED 31 MARCH 2019



Royal Mail plc (RMG.L) is today announcing its results for the full year ended 31 March 2019 and setting out an Outlook for 2019-20. The Company is also presenting its strategy, financial and business performance ambitions for the next three and five years. A range of presentations will set out detailed and comprehensive measures to deliver sustainable shareholder returns and underpin the Universal Service in the UK. This document summarises the main points in the Full Year 2018-19 Results and the strategic plan. A webcast of the presentations referred to above, which commences at 9.30am on 22 May 2019, will be available at http://www.royalmailgroup.com/results.

Rico Back, Group Chief Executive Officer, said: "Our ambition is to build a parcels-led, more balanced and more diversified international business, delivering adjusted Group operating profit margin of over four per cent in 2021-22, increasing to over five per cent in 2023-24."

"At the heart of our refreshed strategy is a UK 'turnaround and grow' programme. In 2018-19, after a challenging year, we delivered productivity improvements and cost avoidance in line with our revised expectations. Over the next five years, through a focus on new ways of working and extending our network, we will ensure a contemporary UK Universal Service.

"The investment in the UK, and expected lower cash flow in the early years, means we are rebasing the dividend and changing our dividend policy. This is not a decision we have taken lightly as we know how important the dividend is to our shareholders. We have sought to find an appropriate balance between sustainable shareholder returns, and investing in the future.

"GLS is a key part of our strategic plan and will make a major contribution to our product and geographical diversification. By combining the best of Royal Mail and GLS, we will enhance our cross-border proposition in this large, growing and global market."

And later,

Dividend in respect of 2018-19

The Board of Royal Mail recognises the importance of dividends to shareholders as well as the imperative to invest in the business to ensure the long-term sustainability of the Group to drive shareholder value.

Taking into account certain timing differences, the in-year trading cash flow in 2018-19 supports our stated progressive dividend policy. The Board is therefore recommending a final dividend of 17.0 pence per share, giving a full year dividend of 25.0 pence per share for 2018-19, an increase of four per cent.

https://www.investegate.co.uk/royal-mai ... 00057733Z/

[Dod101]

Once again a company struggling to maintain its dividend although for the year just ended they have increased the dividend For the current year it is to be 'rebased', ie presumably cut. They also write of 'cost avoidance' We all want to do that.

Not a very strong investment case surely. No wonder shares like Unilever are doing well.

Dod

[csearle]

Also...

In addition to the above dividends paid, the Directors are proposing a final dividend for the year ended 31 March 2019 of 17.0 pence per share, equivalent to £170 million. This dividend will be paid to shareholders on 4 September 2019 subject to approval at the AGM to be held on 18 July 2019.

Didn't spot the ex-div date in there though.

[blobby]

Press Release: https://www.royalmailgroup.com/media/10 ... 018-19.pdf

“The investment in the UK, and expected lower cash flow in the early years, means we are rebasing the dividend and changing our dividend policy. This is not a decision we have taken lightly as we know how important the dividend is to our shareholders.

We have sought to find an appropriate balance between sustainable shareholder returns, and investing in the future.”

Basic earnings per share: 17.5p (25.9p)

“From 2019-20, the policy is for a full year dividend underpin of 15.0 pence per share, which may be supplemented by additional payouts in years with substantial excess cashflow. The dividend is expected to be covered by cumulative trading cashflows over both three and five years”.

15p forward dividend puts RMG on a yield of 6.6% and suggests room for growth as they sort out the profit margin from the disappointing 3.6% this year to the targeted 5% by 2023.

[PinkDalek]

Also...

In addition to the above dividends paid, the Directors are proposing a final dividend for the year ended 31 March 2019 of 17.0 pence per share, equivalent to £170 million. This dividend will be paid to shareholders on 4 September 2019 subject to approval at the AGM to be held on 18 July 2019.

Didn't spot the ex-div date in there though.

The earlier RNS link no longer appears to function. This would appear to be why:

22 May 2019 10:53 am RNS Royal Mail PLC (RMG)
Replacement - Full Year Results 2018-19
https://www.investegate.co.uk/royal-mai ... 53348485Z/

An amendment has been made to the Royal Mail plc Full Year Results 2018-19 announcement released on 22 May 2019 at 7:00
under RNS No 7733Z.
The Dividend dates and Forward-Looking Statement has been included at the end of the announcement.
All other details remain unchanged.

The end of the announcement includes:

Annual General Meeting - 18 July 2019
Ex-dividend date - 25 July 2019
Record date - 26 July 2019
Payment date - 4 September 2019

[Luniversal]

https://www.dividenddata.co.uk/dividend ... y?epic=RMG

If this chart of trailing yields is accurate, you can see how Royal Mail's went into the Warning Zone from about Oct., when it was c. 6% to the All-Share Index's <4%. RMG then shot up with few interruptions until it was nominally yielding almost three times as much.

The zones do not always prophesy accurately, even less than a year before the axe falls (Carillion, Vodafone). But there was plenty of advance warning this time.

[monabri]

What next for our postal service? I can't see it "going under" like Carillion/Interserve. The next dividend is 17p - that alone is a yield of 8.75% (sp 200p). The update indicates a cut to 15p for next year (7.5%). Will there be further cuts or is this a buying opportunity?

[IanTHughes]

https://www.dividenddata.co.uk/dividend-yield.py?epic=RMG

If this chart of trailing yields is accurate, you can see how Royal Mail's went into the Warning Zone from about Oct., when it was c. 6% to the All-Share Index's <4%. RMG then shot up with few interruptions until it was nominally yielding almost three times as much.

The zones do not always prophesy accurately, even less than a year before the axe falls (Carillion, Vodafone). But there was plenty of advance warning this time.

In my case it was on the Trading update on 1 October 2018 that Royal Mail Group (RMG) was taken off my list of HYP candidates for top-up.

Are you telling us that RMG's yield increased directly after that? What a remarkable coincidence!


Ian

[Luniversal]

Are you telling us that RMG's yield increased directly after that? What a remarkable coincidence!


Ian

It is a pity that these very useful Dividend Data yield graphs are not 'dynamic'; you cannot get exact data points and the X-axis is coarsely calibrated. Nor can you add a market index and request a ratio plot.

So I had to make a rough visual judgement about when Royal Mail began to cheapen significantly, but it does look as if last autumn was when sentiment hardened against it. Oct. 2 saw its biggest daily price drop since it was floated in 2013, after a profit warning. The rot that started has only halted with confirmation of the dividend cut.

[IanTHughes]

Are you telling us that RMG's yield increased directly after that? What a remarkable coincidence!

It is a pity that these very useful Dividend Data yield graphs are not 'dynamic'; you cannot get exact data points and the X-axis is coarsely calibrated. Nor can you add a market index and request a ratio plot.

So I had to make a rough visual judgement about when Royal Mail began to cheapen significantly, but it does look as if last autumn was when sentiment hardened against it. Oct. 2 saw its biggest daily price drop since it was floated in 2013, after a profit warning. The rot that started has only halted with confirmation of the dividend cut.

The slide in price and consequent rise in yield started on 1 October 2018 as a direct result of the Trading Update issued that day:

Date       |  Price     |  Yield
03-Sep-18  |  461.5000  |  5.20%
04-Sep-18  |  458.4000  |  5.24%
05-Sep-18  |  467.0000  |  5.14%
06-Sep-18  |  467.0000  |  5.14%
07-Sep-18  |  467.6000  |  5.13%
10-Sep-18  |  469.2000  |  5.12%
11-Sep-18  |  470.4000  |  5.10%
12-Sep-18  |  477.4000  |  5.03%
13-Sep-18  |  482.4000  |  4.98%
14-Sep-18  |  485.5000  |  4.94%
17-Sep-18  |  489.0000  |  4.91%
18-Sep-18  |  485.6000  |  4.94%
19-Sep-18  |  474.1000  |  5.06%
20-Sep-18  |  472.6000  |  5.08%
21-Sep-18  |  476.9000  |  5.03%
24-Sep-18  |  483.1000  |  4.97%
25-Sep-18  |  477.4000  |  5.03%
26-Sep-18  |  480.5000  |  4.99%
27-Sep-18  |  474.0000  |  5.06%
28-Sep-18  |  477.1000  |  5.03%
01-Oct-18  |  391.4000  |  6.13%
02-Oct-18  |  358.6000  |  6.69%
03-Oct-18  |  361.5000  |  6.64%
04-Oct-18  |  354.3000  |  6.77%
05-Oct-18  |  345.0000  |  6.96%
08-Oct-18  |  338.4000  |  7.09%
09-Oct-18  |  353.0000  |  6.80%
10-Oct-18  |  345.3000  |  6.95%
11-Oct-18  |  341.2000  |  7.03%
12-Oct-18  |  340.6000  |  7.05%
15-Oct-18  |  341.2000  |  7.03%
16-Oct-18  |  350.3000  |  6.85%
17-Oct-18  |  347.1000  |  6.91%
18-Oct-18  |  349.9000  |  6.86%
19-Oct-18  |  344.4000  |  6.97%
22-Oct-18  |  358.9000  |  6.69%
23-Oct-18  |  354.3000  |  6.77%
24-Oct-18  |  363.0000  |  6.61%
25-Oct-18  |  363.6000  |  6.60%
26-Oct-18  |  348.7000  |  6.88%
29-Oct-18  |  360.9000  |  6.65%
30-Oct-18  |  358.2000  |  6.70%
31-Oct-18  |  359.0000  |  6.69%

From that date - 1 Oct 2018 - anyone who was thinking about investing in Royal Mail Group (RMG) only had to read that Trading Update to conclude that RMG should be avoided.

Yield "Zones" would have been totally unnecessary even irrelevant in making that decision.


Ian