An Post, the Irish post office, has reported an after-tax profit of €40.7m for 2005, reflectingcontinued tight control of operational costs and the sale of companies in the UK and Spain, which
netted €59.3m. This is the second successive year in which profits have been achieved on the backof significant cost containment and improved cash reserves.An Post made an operating profit of €16.2m, up from €1.8m on 2004. Turnover from continuingoperations rose to €752.9 million from €750.2 million. A provision of €40m was made towardsrestructuring costs arising from the major Collection and
Delivery Change programme agreed late last year with the company’s main trade union, theCommunications Workers’ Union. Consolidation of the financial discipline first brought to bear onthe company from late 2004 was achieved through determined pursuit of the goals laid out in theStrategic Recovery Programme, in particular management of the An Post’s operational cost base.
Operating costs decreased for the second successive year, down €16.5m to €736.7m. Payment of thefull terms of the Sustaining Progress Agreement added €38m to payroll costs. Overall labour costscontinue to be closely managed in 2005 through tight control of overtime and recruitment as well asthe reintegration of the SDS parcels operation back into the mails operation. The SDSrationalisation is producing savings of more than €10m per annum and the business is now operatingprofitably and growth plans are being exceeded.
An Post Chairperson, Ms Margaret McGinley, said that the key strategic objective over the pastthree years had been to return the company to financial stability:
“We turned the corner on this in 2004 and further progress was made in consolidating andstrengthening the position of the company in 2005. The current position represents a solid base onwhich we can build a sustainable future with a degree of confidence and a depth of knowledge of thestark realities of the commercial environment in which An Post now operates.
“We know only too well how even minimal slippage in revenue, cost control or change managementcan trigger a rapidly deteriorating financial crisis. It is crucial that all An Post’s stakeholderskeep sight of the fundamental issues facing the company,” she added.
Highly significant progress was made during the second half of 2005 on the company’s financialservices strategy. Earlier this month An Post signed a Memorandum of Understanding withinternational financial services provider, Fortis, that will lead to the creation of a JointVenture company providing financial
services through An Post unrivalled retail network. Donal Curtin, An Post Chief Executive,commented: “I believe this gives An Post the opportunity to re-establish its relevance to thecommunity it serves. The new banking venture will provide products and services that people want,not just now, but into the future through the post office network. It will build on the trust thatpeople have in An Post and will make it relevant to a younger and more diverse Ireland.”
