The 2002–03 financial year reflects the underlying financial strength of the corporation. This was a relatively stable year in comparison to recent years, when the corporation’s trading performance had been affected by a series of one-off events, such as the transitional costs of the FuturePost network renewal program, Year 2000 compliance, the introduction of the GST, the Sydney Olympics and September 11.

Improved return on revenue performance was a highlight of the year, with the figure increasing to 11.6 per cent (10.7 per cent last year). This is the largest growth in return on revenue recorded since 1992–93.

A notable event in 2002–03 was the first increase in the basic postage rate (BPR) in 11 years, with the price of the domestic stamp rising from 45 to 50 cents on 13 January 2003. This increase was necessary to offset the rising costs associated with providing the basic letter service. The increase in the BPR and associated price changes, as well as volume growth in non-mail products and services, drove revenue growth of 4.3 per cent.

Of the additional $165.3 million of revenue generated during the year, more than 60 per cent relates to volume growth in non-mail products and services. Retail product revenue continued to enjoy strong growth, primarily driven by product extensions in communications and office supplies.

Annual productivity improvement of 3.8 per cent is the result of a range of initiatives, including mail centre rationalisation in New South Wales and Victoria and ongoing organisational restructuring. A new division, Corporate Infrastructure Services, was created during the year to enhance procurement processes and realise cost savings from the vast number of supply contracts operating across the business.

The record profit of $462 million enables Australia Post to continue its high level of dividend returns to the Commonwealth. Assuming a normal distribution of 60 per cent of the corporation’s after-tax profit, ordinary dividends declared from the 2002–03 result are expected to total $200.2 million. A special dividend of $104.1 million was also paid on 30 June 2003.



Capital expenditure increased by $64.7 million during the year to $209.1 million. This increase reflects Post’s investment in strengthening core business infrastructure following 2001–02, when mail network stabilisation was the corporation’s priority.

Investment was dominated by two major mail network projects – the large letters restructure and the parcels restructure. Investment in state-of-the-art large letter sorting equipment and the creation of a world-class parcels network represents the final phase of the FuturePost network renewal program. Both of these projects are well advanced and their completion will enable the corporation to sustain existing operations while achieving continuing operational efficiencies.

Other significant expenditures relate largely to investment in replacement assets, including motor vehicles ($38.1 million), information technology ($36.8 million) and facilities infrastructure ($37.8 million).



Key balance sheet and cash flow indicators highlight the underlying strength of the corporation and its ability to fund expansion for future growth. The corporation’s current gearing of 28.7 per cent is modest and its liquidity ratio remains positive at 1.1. The corporation is confident that capital expenditure in 2003–04 can be fully funded with cash from operations and existing cash balances. With the gearing level low, the corporation is well placed to take advantage of any new business opportunities.



Growth in revenue and profit is forecast to continue. While volume growth in the letters business is expected to remain stable in the short term, Post is implementing initiatives to stimulate demand for direct mail as this is seen as a potential growth area.

The corporation’s investment in upgrading the parcels network is aimed at unlocking the potential for growth in the parcels and logistics business. Post aims to achieve near double-digit growth in retail products in 2003–04. There will be a focus on extending the product range and trialling new retail outlet formats that provide specialised services to small and medium-sized businesses.










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