- Royal Mail posted annual profits at the bottom end of its guidance range and downwardly re-based its dividend, as letter volumes sank and its costs rose.

Pre-tax profit for the year through March rose to £241m, up from £212m, though the rise was due to a lower pension charge.

Adjusted operating profit before transformation costs -- the company's preferred measure of performance -- fell 27% to £509m, at the bottom end of the company's guidance range of £500m-to-530m, which had already been trimmed in January.

Revenue rose 2% to £10.58bn.

Royal Mail increased is full-year dividend to 25p per share, up from 24p on-year.

However, the company also said for the current financial year, it would have a full-year dividend underpin of 15p per share, which may be supplemented by additional payouts in years with substantial excess cashflow.

The dividend was expected to be covered by cumulative trading cashflows over both three and five years.

'Our ambition is to build a parcels-led, more balanced and more diversified international business, delivering adjusted group operating profit margin of over 4% in 2021-22, increasing to over 5% in 2023-24,' chief executive Rico Back said.

'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.'

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