New Zealand Post has unveiled a strong rise in half-year profits thanks to good results from itsfinancial business Kiwibank and the sale of Australia-based courier company CouriersPlease while
parcels growth largely compensated for the mail decline.The New Zealand Post Group reported a 40% rise in net profit after taxation (NPAT) to NZ$100million for the six months ended 31 December 2014 while underlying NPAT after adjusting for nonrecurring items was up by 18% at NZ$84 million. The sale of CouriersPlease to Singapore Postgenerated a one-off gain of NZ$47 million. The group increased half-year revenue by 2.2% to NZ$879million.
New Zealand Post Group chief executive Brian Roche said that in the second year of a five-yeartransformation plan, the overall result confirmed the Group was moving in the right direction,although it was still a challenge to get a return on investment in its core (Mail and Logistics)business.
Roche said New Zealand Post was carrying more parcels than ever before, driven primarily bysubstantial growth in e-commerce activity and associated growth in inbound parcels from overseas inthe lead up to Christmas. Further innovations were planned and improving customer experience wouldcontinue to be a strong focus.
The growth in parcels helped to offset the continuing decline of the traditional lettersbusiness. The ongoing reduction of letter volumes makes it necessary for the Group to maintain itsfocus on structural and operational change to achieve sustainable profit levels.
Letter volumes were down by 9.8% compared with the December 2013 half year. New Zealand Post wason track to start the move to alternate day delivery for standard letters in urban areas from 1July and making significant progress on other operational and processing changes.
The group’s Mail & Logistics division made a net profit of NZ$31 million on externalrevenues of NZ$376 million in the July – December 2014 half-year. One year earlier it had made aprofit of NZ$24 million on external revenues of NZ$375 million.
Kiwibank’s performance for the six months was strong, driven by improved net interest margin andcost containment. Kiwibank made a net profit of NZ$71 million on revenue of NZ$283 million in thefirst half-year compared to NZ$52 million and NZ$231 million respectively the previous year.
Management of the Group’s corporate-owned retail stores was shifted to Kiwibank in the period toimprove the ongoing accountability for the stores’ performance. Work would continue to identifystores in the retail network where services can be hosted by local businesses using models otherthan where New Zealand Post owns the store, including agency and kiosk arrangements.
