An Post delivers payroll savings

An Post’s traditional business of delivering letters declined last year as did the company’s profits — tumbling from €5.8m in 2010 to €2.2m last year.

In order to improve the profitability of An Post, the company has embarked on a cost-cutting scheme which saw the company reduce pay costs by €15.4m.

These savings were made through a full-time equivalent staff reduction of 300 by way of a voluntary exit scheme. The next phase involves a further employee full-time equivalent reduction of up to 1,500 by the end of 2016.

An Post chief executive Donal Connell’s pay package fell by €5,000 from €500,000 to €495,000, as the pay cut only came into effect in May.

He has since accepted a 15% pay cut imposed by the finance minister.

Mr Connell also waived his entitlement to a 25% short-term bonus but a decision on whether he will be allowed to keep his €97,000 bonus accrued over his service has yet to be taken.

Mr Connell said the company’s results reflected An Post’s transition from a delivery company to a more diversified business.

“The process of adapting the business to the commercial realities of the marketplace continued apace through ongoing change implementation, innovation, strategic investment and cost-reduction programmes.

“This is a tough business nationally and globally. The achievement of ongoing cost savings whilst improving quality and innovation is a real challenge but it is the key to our future and will enable us to take advantage of new business opportunities,” he said.

An Post’s core business of delivering post continued to decline, down 23.5% since the peak in 2007. Despite an increase in parcels being delivered from online retailers the overall business of delivering post is forecast to fall a further 7% this year.

Despite the losses in core business, turnover in subsidiaries including One Direct, the Gift Voucher Shop, and the British-based Air Business reached €84m, a 24% increase on 2009

The value of State Savings reached €14.1bn, an increase of €1.4bn on 2010. Other new retail streams showed very encouraging growth, including dollars and sterling foreign exchange and additional agency services for AIB, National Irish Bank and other finance and utility providers.