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Home > Highlights and overviews > Financial Results
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 Against the trend of declining mail volumes, operational efficiency improvements underpinned the record pre-tax profit. Pre-tax profit of $407.2 million exceeded last year’s result by $5.1 million (1.3 per cent). PERFORMANCE The 2001–02 result represents an improvement in the order of $49.1 million in underlying performance. This year’s solid performance follows the non-recurring adjustments that bolstered the previous year’s profitability. It has resulted in ordinary dividends of $175.1 million – representing a 60 per cent distribution of the after-tax profit for the corporation. Pressure within core businesses saw revenue grow by only 0.3 per cent. General weakness in Letters and Parcels was evident among the corporation’s key corporate customers, particularly affecting advertising mail volumes. Strong growth was achieved in retail products, offsetting the significant decline in Philatelic following last year’s Olympic-driven activity. Post continued to combat the impact of substitution in its core business by growing ancillary business revenue in related markets. Logistics revenue grew by 96 per cent on the prior year. Messenger Post increased its presence in the domestic courier market following the acquisition of Federation Couriers in New South Wales, while Mailroom Solutions benefited from the push to outsource internal mail administration. Combined revenue from these businesses amounted to $22.6 million, a 41.9 per cent increase on last year. Building profitable market share remains the primary focus of these businesses. The new Enterprise Bargaining Agreement, EBA5, was successfully negotiated in December 2001 as staff endorsed a wage rise of 2.5 per cent and rises totalling 8 per cent over the period of the agreement. Costs were well contained during the year, with the full benefits from network restructuring achieved due to improved equipment performance, negotiation of supply contracts and human resource management in the Mail & Networks Division. Network efficiency continued to be pursued with variable costs aggressively targeted. Other activities assisting the record 2001–02 outcome included $15.6 million of equity-accounted profit from Australian air Express, a joint venture with Qantas. The increase of $4.2 million (36.9 per cent) on last year reflected increased activities due to changes in the airline industry. CAPITAL EXPENDITURE Capital expenditure of $144.4 million was below that of recent years as the restructuring of the mail processing network project nears completion. Network renewal expenditure was planned in the year but has been impacted by difficulties experienced by the manufacturer of the large letter sorting equipment. This expenditure will now occur in the coming year, as will the significant investment in re-engineering the parcel network. Significant expenditures related to information technology applications ($46.6 million), transport fleet replacements ($31.7 million) and mail network enhancements ($24.8 million). CASH MANAGEMENT The closing cash balance of $680.5 million was $110.9 million higher than at the previous year’s end. The increase is attributed to the strong operating result and improved management of working capital. Lower than expected capital expenditure was offset by special dividend payments of $200 million during the year. Capital expenditure will increase in the coming year with the start of the large letter and parcel network renewal projects. Project expenditure in 2002–03 is forecast at $68.4 million and $63 million respectively. Capital expenditure in 2002–03 will be funded from strong operating performance, which is expected to continue into next year. Current cash balances are adequate to meet future dividend payments. Overall, the corporation’s balance sheet and cashflow position provide a strong platform for growth, both organic and acquired. OUTLOOK Growth is again forecast for next year, despite continued pressure in core businesses. The corporation currently has a submission with the Australian Competition & Consumer Commission seeking a price rise in the basic postage rate and associated services. If successful, the new price is expected to take effect from late January 2003. This will represent the first increase in the basic postage rate in more than a decade. The balance sheet, with a gearing level of 31.7 per cent, provides scope for further growth and specifically allows Post to pursue strategic acquisition opportunities as they arise. Extracting network efficiency continues to be a primary goal and capital investment in both the large letter and parcel networks represents a key investment in the coming year. Market share in ancillary businesses is considered vital to positioning these businesses in their associated markets. It is also necessary for extracting economies-of-scale benefits on the infrastructure investment made by Post over the past two years. The corporation will continue to leverage its strength in its core Letters, Parcels, Retail and Financial Services businesses to meet its growth targets.  Click here for larger Five-year trends table.  Click here for graphs
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