NZ Post SCI targets increasing profitability

NEW ZEALAND POST SCI TARGETS INCREASING PROFITABILITY

New Zealand Post’s Statement of Corporate Intent (SCI) targets increasing profitability and improvements in operational performance by the company over the next three years.

The SCI for the period from 1 July 2002 to 30 June 2005 was tabled in Parliament today.

The SCI is a key public accountability document prepared annually in accordance with Section 14 of the State-Owned Enterprises Act 1986. The SCI reflects the Shareholder’s expectations and the strategic direction and financial performance targets from the company’s business plan.

Chief Executive Elmar Toime said New Zealand Post expected to increase profitability while maintaining high service standards and one of the cheapest standard letter rates in the OECD.

“Four years after deregulation, New Zealand Post continues to lead the market through its high service standards and competitive prices. The company’s business plan assumes Standard Post will remain at 40-cents over the next three years.”

Mr Toime said New Zealand Post’s improving performance targets also factored in losses anticipated by Kiwibank in its start-up phase.

“As planned, Kiwibank is expected to reach profitability in 2004/05 and in time will make a significant contribution to New Zealand Post’s profit.

“For the first time, the SCI includes a separate target for ‘EBIT to Total Tangible Assets’ that excludes Kiwibank. This indicates the projected increase in Kiwibank’s assets over the three-year period, driven by a steadily increasing mortgage book.

“The projected increase in Kiwibank’s assets also reduces the ratio of shareholders’ funds to total assets, even though total shareholders’ funds grow throughout the same period.”

Mr Toime said New Zealand Post’s business purpose and principles remained unchanged.

“Seven years after it was conceived, the company’s business purpose ‘People reaching people through New Zealand Post for messages, goods and payments’ remains relevant in a competitive market with increasing electronic messaging.

“New Zealand Post remains committed to providing world-class mail services. At the same time, we are exporting our knowledge around the world and developing new capabilities to meet demand for electronic products and services related to physical delivery and messaging.”

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