An Post to sell mobile top-up operations

An Post is to sell off its mobile-phone top-up operations in the UK and Spain in deals that are expected to raise up to €40m.
The troubled semi-state company is also set to dispose of a number of smaller subsidiaries in an attempt to raise much-needed cash and to focus the company’s management on core activities.

An Post’s mobile top-up subsidiaries, Post TS (Espana) and Post TS (UK), were acquired in February last year.

The Spanish operation has a network of more than 11,200 outlets and has 30% of Spain’s mobile top-up market.

The British subsidiary has a network of 9,500 outlets. Sources close to An Post said both operations were profitable, so the company was under no pressure to facilitate a quick sale.

Last month An Post announced that it would make a loss of more than €30m in 2003, despite assuring the Department of Communications last October that it would return a profit of €5.3m this year.

Donal Curtin, the new chief executive of An Post, last week presented the communications minister with his plan to make the company profitable by 2005.

Curtin said he would lead a cull of An Post management, letting go 20% of executives next year and a further 20% in the following year.

As well as cutting costs, Curtin will embark on a bid to win more business. One option being considered would involve An Post finding a strategic partner for One Direct, its financial services arm.

One Direct sells a range of financial products, including mortgages, insurance and loans through An Post branches.

Industry sources say the most likely strategic partners are the companies with which An Post already does business.

These include GE Capital, which manages the One Direct loan book, AIB, which has an agency deal with An Post for over-the-counter transactions, and Bank of Ireland, which provides the mortgages sold to One Direct customers.

Unlike most of the An Post units, One Direct is profitable. Given the An Post network of branches and wide customer base, there is likely to be keen interest from potential partners.

As well as cutting the management numbers, Curtin has established a new structure made up of eight division heads reporting directly to him. The key management position is commercial director, which is expected to be filled from outside the company in the next two weeks.

The seven other positions will be filled next week from inside An Post. Each of these heads will have one month to pick their senior managers, who will be given until the end of the year to select their management teams.

Curtin is also hoping to generate revenue from the introduction of five new products. He has decided to focus attention on the small and medium-sized enterprise sector, which he feels has been under-served by the company.

He will also look at how An Post should best respond to the increasing challenge posed by electronic communication and other attempts to bypass the traditional postal system.