Isle of Man Post Office’s annual report shows the taxpayer owned business has returned to profit after several years of losses.
This marks the first time since 2017 the Post Office has made an operating profit and comes after it posted a £500,000 loss last year.
The report, which is due to be laid before the October Tynwald shows that the company made a profit of £1.61m for the year ended March 28 2021 as the number of parcels sent through the posted shot up by 19%. Chief Executive Simon Kneen adds that ‘continued cost mitigation resulting from our five year strategy and a £500,000 reduction in the actuarially determined pension charge’ had help drive the £1.61m profits.
However, Chairman Julie Edge MHK admits that the long term future for counter based services is not clear and that ‘demand for counter-based agency services provided through the network of independent providers of postal services is likely to continue to decline or be withdrawn by agency partners, as it becomes less viable for independent retailers’.
Unsurprisingly the sales of foreign currency plummeted during the period, this drop from £6.5m to £250,000 contributed significantly to the headline turnover figure of the company dropping from £27.9m to £23.4m.
There has been a 10% increase in revenue from mail driven by the 19.3% rise in parcels being sent through the mail as more people shopped online during the pandemic. However, the number of letters continued to fall, down 16.5% over the year.
The number of people earning between £50,000 and £74,999 at the Post Office increased from 10 to 12, however, the financial accounts say this is because of adjustments made to salaries and not because of an increase in the senior management headcount. The number of people earning between £75,000 and £124,999 remained at three.
Commenting in the report, Chairman of the Post Office, Julie Edge MHK, said: ‘While this year has been very challenging in light of the coronavirus pandemic, it has also reaped many positive aspects for IOMPO, with significant progress made on our five-year strategy. We have continued to deliver on the business’ mission, vision and key objectives, with the overriding aim of providing services that meet the changing needs of postal customers in the long term, as a modern self-funded Post Office.
‘Notable progress with our financial objective of returning the business to a sustainable profit has seen IOMPO ahead of its original strategic financial forecast and, I am therefore delighted to report that the business has returned to profit this year, the first time since 2017. This success is testament to the whole team which makes up IOMPO, and I am proud to be Chairman of this well-run and forward-looking establishment.’
Ms Edge also goes on to outline that since October 2019 five sub postmasters have chosen to terminate their contracts to run services. This of course includes the Port St Mary branch which will close at the end of this month, a move that has been heavily criticised by the town’s MHKs.
Dr Michelle Haywood and Speaker Juan Watterson have said in a joint statement: ‘The persistent failure of the Post Office Board to recognise the community value of having town Post Offices, whilst returning over £1.6 million profits shows that the Post Office no longer acts in the national interest.’
However, Ms Edge points out in the report that there has been a natural decline in face to face transactions throughout the pandemic period and a move to more digital services. She adds that ‘in each case the principles of the Tynwald approved strategy have been upheld with alternate service provision provided where appropriate and viable. Consolidation has resulted in customers using alternative offices, to the benefit of the remaining network’.
Looking forward, Ms Edge adds that as banks have closed branches or cut hours around the island, there has been political moves to suggest that the Post Office should provide banking services.
Ms Edge adds: ‘The Board welcomes the opportunity to feed into the independent report into ‘Access to cash’ that will be undertaken by the Department for Enterprise, to fully explore community needs, service options available as well as potential future service alternatives and the associated costs.
‘Subject to the outcome of these government led activities, as envisaged by the Retail Network Modernisation Strategy, IOMPO believes that demand for counter-based agency services provided through the network of independent providers of postal services is likely to continue to decline or be withdrawn by agency partners, as it becomes less viable for independent retailers acting as independent Sub Postmasters and IOMPO to continue to operate services in the current format.
‘Despite these trends, the Board is committed to continuing to provide postal services within the community, with a focus on more convenient, accessible and cost-effective services in the community for residents and businesses to complete their postal business, with local pick-up and drop off locations to post and collect postal items, augmented by a 24/7 online service to allow residential customers to self-administer their own postage and on behalf of others, leaving items at one of the drop off sites or arranging a collection from their home.’