An Post has reported a 7 per cent rise in revenue for last year to €897 million as a decline in its traditional mail business was offset by a 40 per cent rise in parcel volumes, driven by the growth of e-commerce globally.
The State-owned postal company recorded an operating profit of €41 million before transformation costs, pension, interest and taxation, and excluding one-off items, up from €8.4 million in 2017.
The company said this was the second year of “solid financial improvement”, bringing the group out of its loss-making position of €12.4 million in 2016.
Like other postal groups, An Post has been struggling to cope with the decline in traditional mail services as consumers migrate to digital communications for sending letters and paying bills, known in the industry as “e-substitution”.
The company has, over the past three years, undergone a significant transformation, switching the focus away from traditional mail deliveries to a more comprehensive parcels service, delivering goods to households from a variety of big-name online retailers.
As part of the transformation, An Post has downsized its workforce significantly and reduced its network of post offices, a source of great controversy in rural areas.
Rebrand
Earlier this year, it announced a €5 million rebrand, overhauling is logo for the digital age. This involved replacing the traditional wavy lines – which represented a franking mark on a letter – while adding a so-called “Mobius symbol” to the letter “o” in An Post.
The company said the uptick in revenue last year was driven by increased packets and parcel volumes, the full-year impact of price adjustments, the mail volumes generated from the presidential election and referendum, and an increase in retail revenue.
Group operating costs before transformation costs were €859 million, up €24 million on the previous year, it said. This increase in payroll costs was driven by labour inflation costs of €7 million in the year.
Structural changes in the labour model resulted in a reduction of 400 core full-time equivalent staff positions in the year while staffing increased by 200 in other areas, such as servicing election mail and parcel handling, pending the introduction of automation in late 2019.
Gift Voucher Shop
At the end of January 2019, An Post's part-owned 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.
“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 per cent; and the post office network has a radical modernisation programme under way,” chief executive David McRedmond said.
“Operating costs are shifting into new areas of growth and the business is strongly cash positive,” he added.
“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.”
The deficit in An Post’s pension fund stood at just under €48 million at the end of last year, compared with €55.1 million in 2017. There are 17,300 members of the pension scheme and, in value terms, the scheme is the fourth-largest company scheme in Ireland.
