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

 

Sky City : Auckland Convention Centre Cost Jumps By A Fifth

SkyCity Entertainment Group, the casino and hotel operator, is in talks with the government on how to fund the increased cost of as much as $130 million to build an international convention centre in downtown Auckland, with further gambling concessions ruled out. The Auckland-based company has increased its estimate to build the centre to between $470 million and $530 million as the construction boom across the country drives up building costs and design changes add to the bill.
More>>

ALSO:

RMTU: Mediation Between Lyttelton Port And Union Fails

The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. More>>

Earlier:

Science Policy: Callaghan, NSC Funding Knocked In Submissions

Callaghan Innovation, which was last year allocated a budget of $566 million over four years to dish out research and development grants, and the National Science Challenges attracted criticism in submissions on the government’s draft national statement of science investment, with science funding largely seen as too fragmented. More>>

ALSO:

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

More:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

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