A multi-million-pound transformation programme is underway at Guernsey Post as the Company seeks to mitigate the impact of significant external cost increases and declining core volumes.
The Company has moved into a short-term loss-making position over the course of this year, which is forecast to be in the region of £2m. To mitigate the ongoing impact and return the Company to profit Guernsey Post has embarked on a multi-million-pound transformation plan. This is now well under way and includes the redesign of its Postal Headquarters and the installation of fully automated parcel sorting equipment, which is due to be installed and commissioned during the Summer of 2023.
Guernsey Post’s Chief Executive, Boley Smillie, said “Over the last twelve months we have experienced a perfect storm of commercial circumstances. Industrial action by postal workers in the UK has had a significant and detrimental impact on our volume and revenues which has been compounded by inflation-busting increases in contracts with our key suppliers. In total, our financial position has worsened by more than £3m in just over nine months.”
For the first time in more than 20 years the Company experienced an overall decline in volumes during the last quarter of 2022, its busiest period of the year, which has also been attributed to the disruption to postal services in the UK.
Boley Smillie continued, “Whilst the underlying circumstances that have led us to this position are outside of our control the Board and team at Guernsey Post have initiated a very clear plan to achieve efficiencies and revenue growth, the totality of which we believe will improve our performance by £3m. Our investment is being funded entirely from our reserves and there is no requirement for borrowing or use of taxpayers’ money.”
The Company’s Chief Executive has also reassured staff that there will be no compulsory redundancies but that through a combination of natural wastage and possibly voluntary redundancy, the number of positions within the Company will likely reduce by about 10% over the next year. This equates to 30 full time positions.
The efficiencies are in part made possible by the parcel sorting automation, which will cost the Company £1.8m and offers built in scanning technology. At its top speed the automation has the capability to process up to 6,000 parcels per hour.
Boley Smillie continued, “All of my colleagues at Guernsey Post are very adept at dealing with transformation on this scale and understand the situation and what we all need to do. In many ways the current circumstances are similar to those in 2012 when Low Value Consignment Relief was abolished and the then thriving bulk mail volumes diminished over a very short period of time. At that time, we successfully reorganised the business and returned the Company to profitability, and we will do so again”