- Revenue grew to €897m, up 7%
- The core economics improved through appropriate pricing and new international agreements
- Two core businesses established with talented, energetic management teams
- The Post Office network rebuilt its foundation with a deal agreed with postmasters
- Real efficiencies achieved in Mails & Parcel network, and central overhead reduced
- Sale of The Gift Voucher Shop for over €100m was a standout M&A deal
- An Post approaches 2019 with a completely refreshed brand
- Digital transformation and the customer at the heart of our business
30th April, 2019: An Post announced its 2018 financial results at the Company’s AGM today (Tuesday).
The trading results for the financial year 2018 are significantly ahead of those achieved in 2017. The profit of €41.2m before transformation costs, pension interest and taxation and excluding one-off items compares very favourably with a profit of €8.4m in 2017. This is the second year of solid financial improvement, bringing the Group out of its loss-making position of €12.4m in 2016.
David McRedmond, CEO, An Post said “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%; and the Post Office network has a radical modernisation programme underway. Operating costs are shifting into new areas of growth and the business is strongly cash positive.
“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. Each of these is a significant challenge and I thank all of An Post’s staff for their outstanding commitment.”
Group revenue in the year was €897m, up €57m 6.8%, on the 2017 level. This strong performance in the revenue line was driven by significantly increased packets and parcel volumes, the full year impact of price adjustments, the volumes generated from the presidential election and referendum, an increase in retail revenue and continued strong performance in subsidiary companies.
Group operating costs before transformation costs of €859.3m were up €24.1m on the prior year figure of €835.2m. This increase in payroll costs was driven by labour inflation costs of €7.0m in the year with a 1.5% increase having been implemented in May 2018 and additional costs of servicing the presidential election and referendum, offset by a reduction in the annual usage of Full Time Equivalents (FTEs) due to the re-alignment of labour hours to adjust to the decline in traditional mails volumes.
Structural changes in the labour model resulted in a core FTE reduction of 400 in the year while we increased staffing by 200 in other areas such as servicing election mail and parcel handling, pending the introduction of automation in late 2019.
A large investment is being made in the redefining the Post Office network including reducing the number of Post Offices, modernising the Postmaster contract and updating the brand. The Transformation Costs are recorded below the operating profit line. This amounted to €14.0m for the financial year.
At the end of January 2019, The 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 €54m. The continuing trading subsidiaries, Post Insurance and Air Business in the UK, both performed strongly during the year. An Post continues to hold its 10.7% shareholding in Premier Lotteries Ireland, the operator of the National Lottery licence for a period of 20 years up to 2034.
The Group-owned cash at December, 2018 is €115.1m. This balance was €83.9m in December, 2017. The January 2019 Balance Sheet was further boosted by the disposal of shares in GVS, yielding additional cash for investing in the future of An Post.
The deficit on the Pension Fund at 31 December 2018 is €47.9m. This compares with €55.1m at the end of 2017. There are 17,300 members of the pension scheme and in value terms, the scheme is the fourth largest company scheme in Ireland. The Pension Fund had assets under its control of €3,063m at 31 December 2018.
Peter Quinn, Chief Financial Officer, An Post said: “The financial results for 2018 are extremely positive and have built on the encouraging return to profitability in 2017. This, along with the disposal of assets, has enabled the Group to accumulate sufficient resources to execute the new strategic direction and rationalisation programme. These are core to the continued success of the business in the medium term”.