New Zealand Post says FY2015 results are “laying foundations for the future”
New Zealand Post has reported that its net profit after tax (NPAT) for FY15 was $143m, up 34% ($36m) on the previous year.
Underlying profit after tax was $128m, just over 3% ($4m) higher than last financial year.
Revenue was $1,643m, down 0.5%. An unchanged dividend of $5m was returned to the Government.
New Zealand Post said that these figures, achieved “two years into its five-year reset strategy”, indicate that the group has “delivered a solid result and laid important foundations for the future”.
Chief Executive Brian Roche said overall the result was pleasing given market conditions. Also encouraging was the significant operational change achieved in 2014/2015. New Zealand Post said that “these were important steps in the Group’s transformation to a modern parcels, mail and financial services company”.
Kiwibank performed well and contributed the vast majority of profits, off the back of net interest margin growth.
The sale of Australian-based courier company Couriers Please for AUD$A95m during the year yielded an impressive return on the New Zealand Post’s investment, reporting a gain on sale of $46m.
International parcel volume grew strongly in FY 2015. Domestic parcel volume also increased – but not as much as New Zealand Post needed it to, according to Roche.
The company cautioned that it still faces “challenging conditions”. Specifically, it said that “the ongoing decline in the core letters business, a softening global and domestic economy and strong competition in all its markets mean New Zealand Post will have to move faster again this year to maintain positive momentum”.
Roche added: “We still have some way to go to put our mail and logistics business on a sustainable footing. Letter volumes declined by 10% last year and are expected to keep falling by at least that amount annually. Falling letter volumes is a reality worldwide.
“This means we remain in a period of substantial and ongoing change. We will have to keep innovating and driving further reduction in operational and support costs so that we can do more than hold our own, and transform ourselves in the eyes of our customers.“
New Zealand Post noted that the “most significant structural changes completed” over the past year were “the move to alternate day delivery of standard mail in 30 cities and towns – with few compulsory redundancies and no drop in delivery standards – and the completion of a two-year process to centralise mail processing centres, from 55 centres down to three”.
Both these moves, as one would expect, have attracted significant controversy.
Roche commented: “While the steps we have taken were well signalled and have been carefully implemented, we recognise they represent change for some of our staff, customers and stakeholders – who are vital to our ongoing success. We will continue to work hard to bring people with us as we transform the business.”
