The New Zealand Post Group has announced improved profits for the year ended 30 June 2006 thanks toits ongoing diversification strategy and growth in its banking, direct marketing and international
postal activities.The company increased its net profit by 17% to NZ$68.7 million. Operating revenue grew by4.5% (excluding the effects of the partial sale of ECL in 2004/05) to $1,114 million whileoperating expenditure rose 3.3% to $1,019 million. The 2005/06 result enables New Zealand Post toreturn a total dividend to the Government – as sole shareholder – of $27.7 million. The companyalso paid $26.3 million in tax.
Chief Executive John Allen commented: “Rising fuel prices, a tight labour market, increasingcompetition in key market segments and continuing changes in the way customers use our letterservices have combined to make this a challenging year for the New Zealand Post Group. Thefinancial result reflects the efforts of people throughout the business to respond to our changingcustomer requirements, work to contain costs, and identify and pursue strategic opportunities forgrowth.”
The Group’s diversification strategy is proving effective with strong performances fromKiwibank, Datamail Group and the international postal business.
“Kiwibank performed particularly well, more than doubling its after tax profit to $15.8million from $7.2 million in 2004/05. This result was driven by growth in Kiwibank customernumbers, home loans and deposits,” Allen said. Growth in Kiwibank’s retail deposits reflects thelaunch of the new ‘online’ deposit account, while business banking continues to grow as the numberof specialised business banking centres increase.
Datamail Group also performed well ahead of the previous year, with the recent purchase ofMoore Gallagher’s mailhouse business providing a platform for further growth in the future.
The Group’s postal business had a mixed year. The international postal business performedwell, driven by increased direct marketing and magazine distribution into New Zealand. However thedomestic postal business faced rising fuel prices, increasing labour costs and a 2.3% decline inmail volumes.
Diversification – and an international focus – remain essential for New Zealand Post in thefuture, Allen said. “The diverse range of businesses now under the New Zealand Post Group umbrellaenables the company at large to offer services across the broad spectrum of postal, data, banking,data-management, express and logistics businesses.”
