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Growth In Business Mail Contributes To $27m Profit

Growth In Business Mail Contributes To New Zealand Post Profit

A continued focus on cost control and growth in high volume business mail contributed to a 24% increase in New Zealand Post's net profit after tax to $27.1 million for the year ended June 30.

Chief Executive John Allen said the growth in business mail volumes was driven largely by retail, finance and utility companies using mail as a communications tool with customers.

"While overall domestic mail volumes have declined by about 1% per annum over the last four years, growth in business mail is consistent with the international trend towards higher direct marketing mail volumes.

"New Zealand Post is drawing on its wider capabilities, including courier services, unaddressed mail, and electronic messaging with a new programme of work that concentrates on developing ways for customers to use mail and other direct media, in large volumes for communications purposes.

Operating revenue increased by 1.9% to $976.9 million on the previous year ($958.8 million). Expenses continued to be held steady, declining by $0.4 million to $922.8 million reflecting a strong focus on cost control.

A total dividend payment of $16.2 million was made to the Shareholder compared to $13.1 million last year

Chairman Jim Bolger said the strong financial result positioned the company well to invest further in Kiwibank, in postal systems and in its supporting infrastructure.

"Recent additional investment was only made possible by the underlying strength of New Zealand Post. It is one of the few postal organisations in the world that is being sustained by its core business, a particularly remarkable achievement given that it operates in an open deregulated market," Mr Bolger said.

Highlights for the year included a strong performance in the retail business, the continued success of Kiwibank with the addition of new services such as the low-interest credit card and revenue growth in the International mail business in a highly competitive trading environment.

"The retail network was instrumental to the success of Kiwibank and to the development of Red Tickets which sold 750,000 tickets in the year, including 26,000 tickets in just 80 minutes for the Super 12 final. We will continue to expand the range and diversity of services provided through our nationwide network of PostShops and Post Centres," Mr Allen said.

"Revenue from our International mail business increased despite a six per cent decrease in overall international volumes. A record for daily bulk volume mail out of Australia of 15 tonnes was set in April and there was strong demand for the $1 economy Christmas special."

Service delivery - the independent measure of mail delivered on time - was 95.6% for the year ending 30 June. While it remains one of the best results for service delivery in the world, it is below last year's figure of 96.1%.

"Our service performance remains world class, however it is no longer world leading. We will continue to build a service culture that lifts on-time delivery of mail towards 100%," said Mr Allen

"This year's result is a credit to all the people of Post who in their way have contributed to a very successful year. However our future success depends on the sustained satisfaction and pride among both our employees and customers. We must continue to innovate by extending the breadth and depth of our capabilities and not lose sight that we must continue to offer reliable and price competitive service in both physical and electronic environments."

Mr Bolger acknowledged the role played by former Chief Executive Elmar Toime in New Zealand Post's strong performance.

"New Zealand Post's outstanding performance as a State Owned Enterprise is clear evidence of Elmar's leadership throughout his ten years as Chief Executive. During that time, New Zealand Post's revenue increased significantly, and the company developed to incorporate an extensive network, e-business arm, an international consultancy and Kiwibank," he said.

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