NZ Post Result Delivers Strong Platform For Growth

New Zealand Post Result Delivers Strong Platform For Growth

The New Zealand Post Group today announced a net profit after tax of $137.2 million for the year ended 30 June 2005, the strongest ever achieved. The result was driven by the continued strong performance of the Postal Services Group and the maiden year profit of Kiwibank, and included a gain on divestment of $78.6 million from the successful joint venture with DHL for Express Couriers Limited.

Excluding the gain on divestment, the net profit was $58.6 million, an increase of 60.5% on last year’s profit of $36.5m. Chief Executive John Allen said that the result was significant given that it included positive performances from across the Group and was achieved despite ongoing challenges such as increasing competition, wage and inflationary increases, and various rising cost pressures.

“The establishment of Express Couriers Limited (ECL) as a 50:50 joint venture has allowed us to create a more integrated service offer by combining DHL's international network, products and services with New Zealand Post's extensive coverage and expertise in the New Zealand market.

“An additional dividend of $23 million relating to surplus available funds contributed to total dividends of $50 million being paid to the shareholder for the year. This compared with total dividends of $21.9 million for the same period last year and takes the amount paid to the shareholder in taxes and dividends since incorporation to almost $1 billion.

“This year Kiwibank recorded a maiden after tax profit of $7.2 million. The bank continues to improve the services offered to customers and this year rolled out a nationwide `Quickcash' ATM network and established business banking. Customer numbers have increased to 354,000 over the year, with customer deposits reaching $1.42 billion, and home loans and advances reaching $1.57 billion.

“The Postal Services Group, formerly known as the Letters business, recorded a very good year. Despite the continued pressures posed by electronic substitution, overall mail volumes rose by 1.4%, domestic parcel volumes by 7.4% and international outbound volumes grew 1%. While standard rate mail continues to decline, we believe that the significant growth over the year in direct mail and business bulk mail (5% on 2003/2004) is a sign that businesses recognise the enduring value of the letter as a cost effective and targeted communications tool.

“However while this growth is rewarding, the changing volumes and mix of mail has placed pressure on our processing and delivery teams. We are focused on a range of measures that will improve efficiency in the processing and delivery of mail. These measures include installing new technology and starting to get New Zealanders used to the idea of using postcodes on their mail.”

New Zealand Post Chairman Jim Bolger said that over the year the Group had continued to build a sustainable business that was well-positioned for future growth.

“The continued success of Kiwibank, which saw its first business customers coming on board in September 2004, the impressive progress of Express Couriers Limited and the opportunities provided by the DHL joint venture, and the potential around the Datamail Group of companies are evidence of a successful strategy of diversification, which is providing a strong platform for the growth of the New Zealand Post Group.”

Operating revenue increased by $153.5 million to $1,208.9 million for the year, while operating expenses rose to $1,044.7 million, an increase of $54.2 million. Factors contributing to increased revenue and expenditures included the full year consolidation of the Outsource Solution Australia Group (OSA). The sale of Christchurch Mail Centre and Whangarei Post Office also produced gains of $8.3 million.

Other highlights for the year included a strong performance by the Stamps Business, with the world's first `action-reply' Olympic Games 2004 proving extremely popular with New Zealanders. MessageMedia, part of the ECN Group, handled around 10 million emails during the year for 50 organisations throughout New Zealand, and Datamail, RedTickets, Postal Services and CourierPost were all involved in delivering the DHL New Zealand Lions Series. The New Zealand Post Group also provided 750,000 envelopes to more than 3,100 community groups throughout New Zealand through our Community Post programme.

Mr Allen said “New Zealand Post is a connections business. Facilitating these connections are 17,000 people who work for the Group day by day, night by night. I acknowledge their contribution towards what has been a significant year for the New Zealand Post Group. However, while we have created a great platform on which to build, we continue to set ambitious targets, which we must meet to ensure a sustainable business that all New Zealanders, as owners, can be proud of.”

ENDS

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