An Post recorded its best ever performance last year, turning in pre-tax profits of £14 million, up £2 million on 1996 figures. Group turnover was also up - by nearly £38 million to £368.6 million on 1996.
However, the company's operating costs also rose significantly, by £35 million to £354.7 million last year. The company said yesterday that controlling costs was a major concern.
An Post said the increase in turnover (up 11.4 per cent) in its three divisions - Letter Post, Post Offices and SDS - was achieved mainly through volume growth.
The company's after-tax profit was £6.27 million, up slightly from £6.04 million. It represents just 1.7 per cent of total turnover. An Post chief executive Mr John Hynes warned that the company's operating margins "remain far too low to withstand the extent and scale of competition beginning to sweep through European postal markets".
He said an acceptable operating margin would be 4-5 per cent for a postal company. He cautioned that the results should serve only as a basis for guarded optimism.
Turnover in the letter post division - which included a £9.5 million income boost because of the general election last year - amounted to £231.3 million, up 11.6 per cent on 1996. When the election factor is excluded, turnover increased by 7.5 per cent, a pattern in line with recent trends.
"Growth trends were evident in all business sectors, with the continued growth in direct mail particularly encouraging," An Post added.
The company said this division delivered 640 million individual items of mail last year.
The Post Office division, which handles the retail and financial services businesses of An Post, increased its turnover by nearly 3 per cent to £77.7 million. Business volumes grew by 2 per cent, again reflecting the upward trend.
Television licence sales, which An Post handles on behalf of the Department of Arts, Heritage the Gaeltacht and the Islands, came to almost one million, up 1.8 per cent on 1996. It translates into an additional 17,582 licences being sold last year. Turnover in An Post's other division, SDS, which delivers parcels to over 200 destinations internationally as well as nationwide, rose from £36.7 million to £42.3 million last year. An Post chairman Mr Stephen O'Connor said the division had performed extremely well in a very competitive environment.
Over one year ago, An Post bought Ireland On-Line for £500,000. Mr Hynes said it was still losing money, but declined to say how much. It is thought this figure could be in the region of £1.5 million. He said it was the largest Internet provider in Ireland and had doubled its subscriber base from 20,000 to 40,000 in the last year. He predicted that it will become profitable in the near future.
Like other large companies, the Year 2000 bug is a significant issue for An Post and its computer systems and electronic equipment. Last year An Post set up a Year 2000 project group.
