An Post not in crisis, says CEO, hitting out at 'reckless' report on company's finances

David McRedmond, chief executive officer, An Post. File picture

An Post CEO David McRedmond has condemned what he described as an “irresponsible leak” by a Cabinet minister, following media reports that suggested An Post’s financial health was more precarious than presented.

The postal service’s annual report was brought to Cabinet by communications minister Patrick O’Donovan yesterday. It showed that, while profits were up, there was an “inexorable decline” in overall mail numbers.

Profits after exceptional items stood at €5.6m, up from a €20m loss in 2023, on the back of first-ever revenues of €1bn.

However, core mail volumes fell 7.6%, which the report says is in line with global trends.

Despite the decline in volume, revenue from mail rose in 2024 by 14.2%

It is understood that the Department of Arts, Culture, and Sport is to consider a number of proposals, including a system whereby post would be delivered on fewer occasions per week or fewer distribution centres.

Senior ministers said these proposals included “rationalising the footprint” of An Post, with possible reductions in the number of distribution centres to move away from the postal network as was in place “30, 40, 50 years ago”.

One senior minister said that the distribution network would have to change because “people aren’t using it” as they did in the past. They pointed to the fact that the report shows more than 100 post boxes alone were lost in 2024.

The report shows that staff numbers at An Post had grown slightly from just over 10,000 in 2023 to just over 10,200 in 2024, in part due to the servicing of multiple elections last year, which earned the company €64.5m.

Expressing his anger on RTÉ's Morning Ireland, Mr McRedmond highlighted strong financial results presented to the Cabinet: "They showed the highest revenue we've ever had, over a billion in revenue for the first time.

"They showed that we grew our earnings from €38m to €55m. They showed our net profit was at €10m.

"The company is performing extremely well. We've got the highest level of parcel growth of any postal operator in Europe.” 

While acknowledging the positive impact of last year’s elections on revenue, Mr McRedmond said if it had not been the elections, "it would be something else.” 

He emphasised that An Post is seeking more cash not because of financial trouble, but due to rapid growth.

“We’re growing in commercial parcel markets," he said.

"We get paid on 60 or 90 days' credit. We are constantly growing. So we need more working capital... but this is all coming from a position of strength."

Dismissing claims that An Post’s cash reserves had dipped below €1m, Mr McRedmond stated: “That’s untrue. At the end of the year, we have €38m in cash reserves. And this year, so far... we are performing well ahead of our budget.” 

He voiced concern for An Post’s 10,000 employees and commercial customers.

“They’ve been so disrespected by this… It’s so disrespectful. And the other is our customers... if they read this morning, that An Post is on the brink... It’s reckless in the extreme.” 

Mr McRedmond also reiterated An Post’s commitment to maintaining its post office network.

“We have no plan to close post offices. None.

"We occasionally relocate or we do something. Very occasionally, post offices will close because somebody retires and we can't get somebody to replace them. But the post office network is doing well.

"But quite rightly, postmasters are saying to the government, you want us to do more government services, pay us for them.” 

Mr McRedmond concluded by calling for long-overdue policy changes, including lifting An Post’s borrowing cap and regulatory flexibility.

“These are normal conversations… coming from a position where the company has had one of its best years.”

'Challenges'

The communications minister has admitted there are “challenges” facing An Post, due to the decline in letter-sending.

However, Patrick O’Donovan rejected claims that there would be any changes to the speed or frequency of postal deliveries, after the Cabinet was told An Post is facing an “inexorable decline” in mail volumes.

Mr O’Donovan acknowledged that any such changes would ultimately be for An Post to decide.

On Tuesday, senior Government ministers were briefed on several options being considered, including fundamental changes to how post is delivered.

It is understood that the Department of Arts, Culture and Sport is examining various proposals, including a system in which post would be delivered fewer times per week or a reduction in distribution centres.

Senior ministers said the proposals involve “rationalising the footprint” of An Post, potentially reducing the number of distribution centres and moving away from a postal network model that dates back 30 to 50 years.

Asked directly whether there would be a scaling back of delivery centres or the number of days on which letters are delivered, Mr O’Donovan replied: “No, there’s not.” However, he reiterated that there are “challenges” in maintaining traditional delivery services as mail volumes fall.

“Obviously, look, there are always going to be challenges with mail delivery. There’s challenges in Luxembourg, there’s challenges in Denmark, there’s challenges everywhere because all of us have moved to a digitalised future,” Mr O’Donovan said, speaking on RTÉ Radio One.

“An Post are well ahead of the curve in terms of making sure that their future isn’t going to be inextricably linked just to next day mail delivery services.”

He declined to share details of his presentation to Cabinet, stating that any decisions about the future of An Post rest with the chief executive and board of the semi-state company.

The Minister also criticised Cabinet leaks, while expressing full confidence in An Post’s leadership.

Mr O’Donovan denied being the source of a media leak, following public criticism from Mr McRedmond during the interview on Morning Ireland.