Guernsey Post is pleased to announce a profit for 2011/12, despite facing significant financial challenges, including the loss of Low Value Consignment Relief (LVCR), and the continuing decline in traditional mail volumes.
Guernsey Post made a profit before tax of £0.4m in 2011/12, which represents an improvement of £1.3m when compared to the previous years loss before tax of £0.9m.
The improvement in performance can be attributed to a number of factors including strong volume growth in International mail, and the achievement of a significant cost reduction plan.
Boley Smillie, Chief Executive of Guernsey Post said:"We are very pleased to be announcing an operating profit this year which has been achieved despite very difficult trading conditions. The performance of the business has improved significantly, primarily due to our cost reduction initiatives but also strong growth in International mail."
Looking ahead to 2012/13, Guernsey Post is expecting another challenging year. However, the Company is still intending to make a profit thanks to the prompt action that has been taken to reduce costs and develop the business in response to the removal of LVCR.
"In the current year we are anticipating that our bulk mail revenue will fall by over £16m, but the impact has been mitigated by significant savings in both payroll and non-payroll expenditure achieved over the last two years."
The return to profit allows Guernsey post to reinstate its ordinary dividend to the Shareholder, which will be £89k. GPL's annual report and financial results were discussed with the shareholder, (Treasury and Resources Department) earlier this week at the company's AGM. The Department's Minister, Deputy Gavin St Pier said:"We have been impressed with how Guernsey Post has responded to the serious challenges with which it has been confronted with over the past eighteen months or so. GPL's Board of Directors are to be congratulated on the company's response to those challenges and its strong performance over the period. The fact that GPL is anticipating a further profit for the next financial year speaks volumes for the Board of Directors, its management, trade unions and the workforce".
Furthermore in its 2011 annual report the Guernsey Post Board signalled its intention to undertake a review of its asset portfolio and capital requirements in the context of the Company's future funding requirements and strategy. Following a rigorous review of its asset portfolio, capital and working capital requirements the Guernsey Post Board has decided to return £5m to the Shareholder in the form of a buyback of shares. This will be subject to a States Resolution anticipated to be presented for debate by the States in October.
Boley Smillie Chief Executive said:"2011/2012 will be remembered as one of Guernsey Post's most challenging years but regardless of the difficulties we've faced, the company has remained determined to achieve its commercial objectives and return to profit. Our employees and trade unions have risen to that challenge and demonstrated real commitment to the business."