NZ Post sells software support firm in shift to slimmed-down operations
By Paul McBeth
Aug. 9 (BusinessDesk) - New Zealand Post, the state-owned postal service, sold its software support subsidiary in its latest move towards a slimmer operation as it deals with dwindling demand for its primary business.
The state-owned enterprise sold the Electronic Commerce Network to Australian-based business support firm B2BE for an undisclosed sum, effective yesterday, it said in a statement.
ECN develops and supplies software for business-to-business messaging and managing supply chains. NZ Post took full control of ECN a decade ago as it looked for an electronic commerce complement to its physical distribution service.
The sale is the latest in NZ Post's growing focus on its postal, financial and digital services, and is part of a new strategy that's seen the SOE shut its Transend division last year, and exiting its underperforming line haul business in its Australian Parcel Direct Group, John Tulloch, communications manager, told BusinessDesk in an emailed statement.
NZ Post reviewed its non-core portfolio with a view to either divesting or restructuring those investments, according to the SOE's statement of intent for the 2011 though 2014 financial years.
The statement of intent shows NZ Post has planned divestments of $33 million in the 2011/12 year, followed by $25 million in each of the following years. Any profits from asset sales won't be returned to the government, rather they will be pumped into NZ Post's operation and investment needs.
The SOE has also pared back its targeted shareholder returns, with a minimum dividend of $5 million factored in over the next three years.
NZ Post has had to contend with a slump in demand for its mail delivery services, and has publicly mulled whether to cut back those services to three days a week.
More recently, the SOE ended a joint venture courier arrangement with DHL after eight years, buying out its partner's stakes in Express Couriers of New Zealand and Parcel Direct Group.
NZ Post has $200 million of subordinated notes listed on NZX's debt market paying annual interest of 7.5 percent. They last traded at a yield of 5.75 percent, at least a two-year low according to NZX figures, at a price of $105.49 per $100 face value.