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

 


Improved operating profit; parcels overtakes letters revenue

New Zealand Post Group posts improved operating profit; parcels overtakes letters revenue

29 August, 2014

The first year of the New Zealand Post Group’s five-year strategy has yielded an improved operating performance in 2014.

The Delivering our Future refreshed strategy, announced last year, aims to transform the Group in response to falling letter volumes and profit growth opportunities in financial services and parcels.

The Group’s reported net profit after tax (NPAT) for the year was $107 million. The corresponding figure from the previous year was $121 million – which was bolstered by a gain of $72 million from the sale of Datacom.

At an operating level, the Group’s net profit after tax in the year ended 30 June 2014 increased to $124 million, up from $111 million the previous year (up 11 per cent). The improvement was driven by lower structural costs, growth in the parcels and logistics business, and a steady financial result from Kiwibank.

A dividend of $5 million was returned to the Government.

Group Chief Executive Brian Roche said the better operating performance was an encouraging validation of New Zealand Post’s strategy so far, as the Group starts to rebuild sustainable profitability. Transformation from a traditional postal service business would continue and New Zealand Post expected to make further progress this year.

Mr Roche said overall, the delivery services (mail and logistics) business had performed well in 2014 and improved its contribution, in a year that marked a historic shift in revenue mix.

“For the first time in New Zealand Post’s history, revenue from packages and parcels has exceeded revenue from letters. This marks a significant moment for us and reinforces the need to make the changes we have embarked upon.

“We will continue to invest in an integrated parcels, logistics and letters business, move non-corporate retail outlets to a ‘store within a store’ basis and seek parcel growth and ecommerce opportunities as letter volumes drop further.”

Domestic letter volumes fell by around 7 per cent to 642 million in 2014 and are forecast to drop to below 500 million a year within three years.

Kiwibank returned a 3 per cent improvement in after-tax profit of $100 million, driven primarily by increased interest margins and release of bad debt provisions, Mr Roche said.

Kiwibank grew its main bank (personal banking) market share from 10.3% to 11.0% during the year and, following a final $40m equity investment by

New Zealand Post, is continuing to track towards capital self-sufficiency. Lending growth was softer than forecast amid a rising interest rate environment in the second half of the year, but still above that of major competitors.

In a significant change in emphasis, Kiwibank has recently been given operational responsibility for all corporate retail stores, to further develop and deepen customer service relationships.

The Group’s balance sheet remains stable and supportive of the long term focus on employing capital in areas of the business with the most profit growth potential.

Mr Roche said overall he was satisfied with progress made during the year against the Group’s strategy.

“The changes we have made are starting to flow through in our financial performance and we expect further improvements from these changes over time.

“However, the continuing decline of letter volumes here and overseas and a highly competitive environment for banking and parcels means we cannot afford to take our foot off the accelerator. Our total focus on successful implementation of the strategy will continue in 2015.”

FY 2014 $mFY 2013 $m
Revenue1,6611,688
Expenditure1,5051,623
Operating EBIT187163
NPAT107121
Operating NPAT124111

Underlying (operational) net profit after tax since 2006

© 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