An Post Reports Profit of €6.5m
28 April 2005
An Post has reported an after-tax profit of €6.5m for 2004. The result is a turnaround of €45m since last year and ends three successive years of escalating losses which threatened the future of the company.
The annual report and accounts, published today, reveals an operating profit of €1.8m. Exceptional income of €5.3m from property disposals and other items produced an outturn which signals the success of crisis control measures.
Turnover in the year at €750.2m was up by €41m – an increase of 5.8 per cent on 2003. Staff and postmasters’ costs at €502.4m were marginally up on the previous year while other costs decreased.
The financial turnaround was achieved by focussed and determined management action to implement the recovery strategy particularly by cutting non-pay costs, curtailing pay costs through stringent control of overtime and recruitment, and the non-payment of Sustaining Progress.
While the result is highly satisfactory in the context of the losses of recent years, future prospects for the Company remain uncertain. Mail volumes declined by 1.3 per cent since 2003 - the second successive year - despite national economic growth of five per cent a year and an additional 80,000 new delivery points.
The problems for An Post are compounded by a continuing decline in social welfare transactions through the post office network – though offset slightly by the growth in BillPay volumes – and will require an urgent strategy to ensure a viable scale of business.
Despite the success of strict cost control measures the An Post cost base remains too high and substantial cuts are essential through headcount reductions, efficiencies, work practice changes and the implementation of the automation agreement.
An industrial relations environment which is resistant to change, regardless of the business and financial circumstances of the Company, has been excessively demanding of the focus and energies of senior management, the report says.
The resistance to change had prevented all efforts to elevate quality levels and introduce efficiencies. As a result, progress had been stalled on the Company’s price rise application which had been submitted to ComReg in May of last year.
Ms Margaret McGinley, chairperson of the Board of An Post, described the result for the year as “having significantly exceeded expectations.” It had been based on a policy of tight financial management and was encouraging.
“The Company’s finances have been stabilised and the immediate liquidity problems, which emerged in 2003, have been overcome. It is now clear that implementation of the Recovery Plan can provide An Post with a future in which modest growth and profitability can be secured,” she added.
Chief executive Donal Curtin said that damaging service disruption at local and national level and the continuing lack of real progress on change continued to be a source of deep concern.
“Our aim now must be to build on the financial stabilisation achieved in 2004 by concentrating on customer orientation and workplace flexibility which will allow us to survive in the new competitive order that is rapidly approaching,” he added.