An Post reports “second year of solid financial improvement”
Irish national postal service An Post released its 2018 financial results at the Company’s AGM this week.
The company reported a profit of €41.2 million before transformation costs, pension interest and taxation and excluding one-off items in comparison to a profit of €8.4 million in 2017.
This is the second year of solid financial improvement, bringing the Group out of its loss-making position of €12.4 million in 2016.
David McRedmond, CEO, An Post said: “In 2018 we built the foundations to transform An Post’s core activities. The focus on e-commerce is seeing parcel volumes grow by almost 40%; and the Post Office network has a radical modernisation programme underway. Operating costs are shifting into new areas of growth and the business is strongly cash positive.
“In 2019 we aim to automate core parcel operations; refresh the brand, marketing and customer interfaces; launch An Post Money and An Post Commerce; and develop a leaner, more flexible corporate centre. Each of these is a significant challenge and I thank all of An Post’s staff for their outstanding commitment.”
Revenue
Group revenue in the year was €897 million up €57 million 6.8%, on the 2017 level. This strong performance in the revenue line was driven by significantly increased packets and parcel volumes, the full year impact of price adjustments, the volumes generated from the presidential election and referendum, an increase in retail revenue and continued strong performance in subsidiary companies.
Costs
Group operating costs before transformation costs of €859.3 million were up
€24.1 million on the prior year figure of €835.2 million. This increase in payroll costs was driven by labour inflation costs of €7.0 million in the year with a 1.5% increase having been implemented in May 2018 and additional costs of servicing the presidential election and referendum, offset by a reduction in the annual usage of Full Time Equivalents (FTEs) due to the re-alignment of labour hours to adjust to the decline in traditional mails volumes.
Structural changes in the labour model resulted in a core FTE reduction of 400 in the year while we increased staffing by 200 in other areas such as servicing election mail and parcel handling, pending the introduction of automation in late 2019.
Transformation Costs
A large investment is being made in the redefining the Post Office network including reducing the number of Post Offices, modernising the Postmaster contract and updating the brand. The Transformation Costs are recorded below the operating profit line. This amounted to €14.0 million for the financial year.
Subsidiaries
At the end of January 2019, The Gift Voucher Shop (GVS) was sold to Blackhawk Network, a global financial technology company in a deal which valued the An Post shareholding in GVS at €54 million. The continuing trading subsidiaries, Post Insurance and Air Business in the UK, both performed strongly during the year. An Post continues to hold its 10.7% shareholding in Premier Lotteries Ireland, the operator of the National Lottery licence for a period of 20 years up to 2034.
Peter Quinn, Chief Financial Officer, An Post said: “The financial results for 2018 are extremely positive and have built on the encouraging return to profitability in 2017. This, along with the disposal of assets, has enabled the Group to accumulate sufficient resources to execute the new strategic direction and rationalisation programme. These are core to the continued success of the business in the medium term”.
