Post Office Ltd revenue, profit down in “challenging” first half
The state-owned operator of the network of more than 11,500 post offices across the UK issued an interim financial statement showing that turnover fell 1.7% year-on-year in the six months up to 29 September, down to £475m.
The company said its operating profit fell 56.6% compared to last year’s first half, to £23m, while pre-tax profit before financing costs slumped 89% to £20m.
The cut in profits included a £20m reduction in the subsidy provided by the UK government, Post Office Ltd said.
Overall turnover was hit by 9% year-on-year declines in government services revenue (to £75m) and telecoms revenue (to £65m), which spoiled the 5.7% growth achieved in the £147m financial services revenue. The mails and retail business saw its revenue slip 0.5% year-on-year to £183m.
Post Office Ltd said it had been a “challenging” six months, but insisted it had made “great strides”, with its major branch modernisation programme continuing.
Paula Vennells, the Post Office Ltd Chief Executive Officer, said: “In what has been increasingly volatile and competitive market conditions we have further reduced our reliance on taxpayers’ money. We are delivering the biggest modernisation programme in UK retail history, transforming around 10 branches a day. As we move through the year we must continue to drive forward our transformation plans. Ensuring we both reduce our costs and at the same time meet our customers’ needs for convenience, simplicity and speed of service.”
Post Office Ltd said it was continuing to develop its mail services through the new Click and Collect offering with Royal Mail, and the Drop and Go service which speeds up parcel shipping.
“We are working hard to increase revenue. It’s pleasing to see the great progress made in financial services where in the first half of the year we have seen growth of 11% year on year in Personal Financial Services,” said Vennells.
“We have cemented our position as the infrastructure for community banking with 95% of UK current account customers able to access their accounts in our branches. We are also working with Royal Mail to develop market leading products and services for both small businesses and consumers.”
Post Office Ltd is facing possible strike action this Christmas, according to a warning by the Communication Workers Union. The union said last week that its admin and supply chain members had voted 76% in favour of industrial action over complaints about pay.