Guernsey Post is delighted to announce a profit after tax of £0.7m for 2012/13, a 40% improvement on the previous year despite the severe impact of the loss of Low Value Consignment Relief (LVCR) and declining core volumes. The Company is also proposing to give back more surplus cash to its Shareholder, Treasury & Resources, bringing the amount returned in 2013 to £8.5m.
Boley Smillie, Chief Executive of Guernsey Post said:
"We are extremely pleased to be reporting an improvement in profit, particularly in the context of a 37% reduction in revenue due to the loss of LVCR. Our employees should feel immensely proud that their actions and commitment have resulted in an excellent financial performance over the year."
The Company has experienced a reduction in revenue of almost £19m, which is mainly the consequence of losing 78% of its UK bulk mail volumes following the decision to scrap LVCR. This loss in revenue has been offset by cost reductions and growth in packet volumes resulting from the boom in online shopping. Overall expenditure fell by 37% including a £1.3m reduction in staff costs, or 12%.
"Traditional mail volumes are still declining in favour of new technology. Whilst this presents us with a great many challenges it also creates exciting opportunities; the popularity of online shopping continues to increase and we have seen growth in packets and parcels of 13% in the last year alone." continued Mr Smillie.
Looking ahead to the next year, Guernsey Post is expecting another challenging year as the Company feels the full impact of the loss of LVCR and traditional mail volumes contract further.
"Our challenge over the next year is to focus on revenue growth. We have built strong relationships with our key customers and we anticipate strong growth in international mail and the greetings card market. Online shopping continues to grow at an exceptional rate and Packet and Parcel deliveries are very much the future for our business." said Mr Smillie.
The Company is still expecting to make a modest profit in 2013/14 and will continue to work hard to embrace the change that is taking place within the industry and to create new opportunities.
The profit generated this year enabled Guernsey Post to deliver another ordinary dividend to the States of Guernsey, which will be £139k.
Furthermore, following another review of the company's asset portfolio and capital requirements, the Guernsey Post Board has concluded that the Company continues to have more capital than it needs and is pleased to announce an additional return of £3.5m to its Shareholder, Treasury and Resources. This will be subject to a States resolution but will bring the total amount returned to £8.5m over the last year.