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Profit Increase Signals Strong Future For NZ Post

Thu, 16 Sep 2004

Profit Increase Signals Strong Future For NZ Post

The New Zealand Post Group announced today a net profit after tax increase of 35 per cent to $36.5 million for the year ended 30 June, the biggest yearly growth since 1994.

Chief Executive John Allen said the turnaround of the express courier business and a strong performance from the International mail business and Kiwibank contributed to the positive result.

"As we continue to face the challenge of overall declining mail volumes, we have seen that customer needs are changing. The New Zealand Post Group is responding to that change by evolving our business to provide a wide a variety of products and services that help New Zealand run.

"While mail is still the engine room that drives the New Zealand Post Group, people are using it in different ways. Despite 2.3 per cent fewer items delivered this year, we have seen growth in some areas. Domestic parcel volumes grew by 8.2 per cent and airmail packets and parcels sent out of New Zealand rose more than 10 percent. Our urgent courier business Pace! achieved a 12 per cent growth in volumes this year, while at December 2003, direct mail volumes had grown by 13 per cent on the previous year.

"The strong performance of our express business in a tough and challenging market positions the Company well for continued growth. During the year we also began talks with DHL about a joint venture opportunity. These discussions are moving forward positively.

"The ambition to bring New Zealanders accessible, affordable banking has seen Kiwibank customer numbers grow this year by 72 per cent to 253,000 with 16 new branches opening. The bank's financial performance is now almost a year ahead of target."

Operating revenue passed one billion dollars for the first time to $1,051.3 million, an increase $74.4 million on last year. Operating expenses rose $63.7 million to $986.4 million.

A total dividend payment of $21.9 million was made to the shareholder compared with $16.2 million last year.

New Zealand Post Chair Jim Bolger said the underlying strength of the Company positioned New Zealand Post well for further investment in Kiwibank and in infrastructure.

"The extraordinary success of Kiwibank is an example of sensible business decisions made to grow the assets of the New Zealand Post Group. After only two years of trading it has exceeded all targets and expectations of even the most optimistic backers. We continue to invest and grow Kiwibank and are well advanced with plans for small business banking and the introduction of Kiwibank ATMs," said Mr Bolger.

Other highlights for the year include a record profit from the stamps business with the successful Lord of the Rings stamp issue, the acquisition of a 75 per cent shareholding in Outsource Solutions Australia Pty Ltd and the launch of MediaScene - an independent survey of New Zealand advertisers and agencies.

"Service delivery - the independent measure of mail delivered on time - was 96.8 per cent for the year ended 30 June, a result that puts service standards for mail delivery in New Zealand among the best in the world. While this is a pleasing result, we will continue to strive towards an on time delivery of mail of 100 per cent," Mr Allen said.

"In April we increased the price of standard letter for the first time in 12 years. At 45 cents it still remains one of the lowest in the world. However, the rise was necessary to offset rising costs associated with providing mail services."

"About 17,500 people work for the New Zealand Post Group in some way and I acknowledge every one for the part they have played in making this a very successful year. However, we must continue to create a platform for the future across the New Zealand Post Group. We are changing how we operate by focusing on the customer. This is critical for the growth of the Group and will remain at the cornerstone of everything we strive for."

Financial performance

Financial Performance

Twelve months ended 30 June 2004

Twelve months ended 30 June 2003

Operating revenue

$1,051.3m

$976.9m

Operating expenditure

$986.4m

$922.8m

Net surplus

$36.5m

$27.1m

Operating surplus before interest and tax

$73.4m

$62.3m

Total dividend

$21.9m

$16.2m

Issued and paid-up capital

$192.2m

$192.2m

Total equity

$350.3m

$320.3m

ENDS

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