Royal Mail Cuts Dividend, M&S Launches Rights Issue

M&S's shares are off after details of the rights issue emerged, while Royal Mail, one of the FTSE 350's highest yielding shares, is to cut its dividend

James Gard 22 May, 2019 | 11:09AM
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Royal Mail Group

Marks & Spencer (MKS) and Royal Mail (RMG), two of the top dividend payers in the FTSE, have surprised investors with their annual results today. M&S has revealed plans for a discounted rights issue while the postal giant is the latest in a line of high-yielding stocks to slash its dividend. 

Investors Wrong-Footed by Rights Issue

Marks & Spencer shares fell sharply on Wednesday morning as it revealed the details of its rights issue to fund its joint venture with Ocado (OCDO). A rights issue is when shareholders are given the opportunity to buy more shares at a discounted price. Companies do this to raise money for investments and acquisitions. The downside for investors is that a rights issue dilutes the value of existing shares, simply because there are more shares in existence but the business is still worth the same amount. 

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Marks & Spencer Group PLC238.10 GBP0.00Rating
Ocado Group PLC1,829.00 GBP0.00Rating
Royal Mail PLC505.60 GBP0.00

About Author

James Gard  is content editor for