Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


New Zealand Post Group Annual Result

New Zealand Post Group Annual Result

27 August 2013

Financial services, courier operation boost New Zealand Post Group operating result

The New Zealand Post Group has achieved a net profit after tax (NPAT) of $121 million in the year ended 30 June 2013, compared to a reported profit in the previous year of $170 million. As occurred last year, a number of one-off non operating items have influenced the reported profit results.

While the NPAT result is down on last year, at an operating level the Group performance improved from $80 million to $111 million (up 41 percent).

The operating performance improvement was driven by a solid financial result from the financial services (Kiwibank) businesses, and growth in the courier segments of the Group. The postal segment however, continues to face an accelerating decline in mail volumes, further highlighting the need for fundamental changes in how services are delivered.

The result in part reflected the first year of the return to full ownership of Express Couriers Limited (ECL) which operates the CourierPost and Pace services. ECL performed well in a highly competitive environment to post an after tax profit of $17 million.

Group Chief Executive Brian Roche said ECL’s performance reaffirmed that express delivery is a core element of the Group’s current and future strategy.

“ECL’s result in a highly competitive market was encouraging. There is significant growth potential in our express delivery business for parcels and time-sensitive documents,” said Mr Roche.

Kiwibank led a strong performance by the Group’s financial services business operations with a 23 percent improvement in after-tax profit of $97 million.

Mr Roche said Kiwibank achieved an increase in market share in a relatively static credit environment. Bad debt expense was improved by the release of several large specific provisions following successful resolution of those debts.

“Our financial services portfolio continues to be a key growth driver for the Group. That growth and Reserve Bank regulatory requirements however create the demand for more capital.

“Kiwibank’s own earnings, planned market issuances and support from the Group will meet those demands in the short-to-medium term. Discussions around the long-term capital support for the Bank are ongoing,” said Mr Roche.

The postal business experienced a fall in revenue of $30 million with the decline in postal volumes accelerating from 6.7 percent to 7.5 percent. There were 63 million fewer items in the postal network compared to the previous period.

Mr Roche said tight cost management enabled the letters business to essentially break even at an operating level, however consistent with global trends the rapid decline in the use of letters as a means of communication is placing increasing pressure on this service. He said that while there continue to be opportunities for the Group’s Mail & Communications business, fundamental change is required in the network to adjust to changing customer preferences and access these opportunities.

“We are implementing strategies such as the reconfiguration of our mail processing network and exploring digital solutions. That is only part of the solution and there remains a pressing need for greater flexibility in the Deed of Understanding with respect to delivery and the retail store network. The desired flexibility is required so we can implement further strategies when necessary and to provide our customers with certainty.

“We continue to face significant challenges in both our traditional letters business and the maintenance of our store network. Change is therefore inevitable as we design and execute on a new service model which allows for a financially sustainable future and an acceptable return on capital,” said Mr Roche.

The one-off adjustment for the impairment of $30.6 million taken against some of the postal assets, including mail processing capacity to be decommissioned, is a further reflection of the necessary action taken to achieve fundamental change.

The Group balance sheet was aided by the retirement of debt utilising the proceeds of the sale of the stake in Datacom (which recognised a gain on sale of $71.1 million) and the sale of properties. The debt retired was raised principally to fund the acquisition of the courier business in 2012.
“The Group remains optimistic and sees opportunities across its business activities especially the financial services and parcel businesses,” said Mr Roche. FY 2013 $m FY 2012 $m
Revenue 1688 1309
Expenditure 1623 1224
EBIT 163 205
NPAT 121 170
Operating NPAT 111 80


ends

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Interest Rates: RBNZ Hikes OCR To 3.5%, ‘Period Of Assessment’ Now Needed

Reserve Bank governor Graeme Wheeler raised the official cash rate as expected, while signalling a pause in rate hikes to assess the impact of moves so far this year. The kiwi dollar sank after Wheeler said its strength was “unjustified” and that the currency could have “a significant fall.” More>>

ALSO:

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Warming: Warming Signs From State Of Climate Report

Climate data from air, land, sea and ice in 2013 'reflect trends of a warming planet' -- says the latest State of the Climate report, launched by U.S. and New Zealand scientists. More>>

ALSO:

Scoop Business: Embrace Falling Home Affordability, Says NZIER

Despair over the inability to afford a house is misplaced and should be embraced as an opportunity to invest in more wealth-creating activity, says the principal economist at the New Zealand Institute of Economic Research, Shamubeel Eaqub. More>>

Productivity Commission: NZ Regulation Not Keeping Pace

New Zealand regulators often have to work with out-of-date legislation, quality checks are under strain, and regulatory workers need better training and development. More>>

ALSO:

Callaghan Innovation: Investment To Help Deepen Innovation Reporting

Callaghan Innovation, the government’s high tech HQ for Kiwi business, is to help deepen New Zealand media coverage of the commercialisation of innovation through an arms-length partnership with independent business news service BusinessDesk. More>>

ALSO:

Tax Credits, Grants: Greens $1Bn R&D Plan

In the Party’s headline economic announcement, the Greens have launched their plan to build a smarter, more innovative economy which has as its centrepiece an additional $1 billion of government investment in research and development (R&D) above current spend, including tax breaks for business. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news