Background information #1:  Letters & associated products

Australian letter volumes continue to grow

Australia Post’s 2006/07 Annual Report reveals that letters continue to be a vital and valued form of communication, with the postal corporation recording its strongest growth in letter volumes since the 1990s.

The volume of domestic letters sent in Australia increased by 1.9 per cent in 2006/07 – which equates to an extra 93.1 million letters over the previous year.  This growth in letter volumes was mainly driven by direct mail (up 8 per cent) and unaddressed mail (up 11.4 per cent).

Total revenue growth for Australia Post’s “letters & associated products” business was 1.7 per cent.  But the profit earned from the letters business declined by 8.4% (or $14.6 million less than last year).

The decline in profit can be attributed to rising costs (wages, fuel charges and the addition of new delivery points) outstripping revenue growth (due to the price freeze on the 50-cent basic postage rate).

Australia Post improved its letter delivery performance during 2006/07.  The independently monitored results found that Australia Post delivered 96.3 per cent of all domestic letters on time or early (up from 95.6 per cent last year).

The Annual Report outlines a number of initiatives that Australia Post is investing in to ensure that letters remain relevant to contemporary Australian consumers and businesses.  Recent initiatives include Scent mail and a new bulk mail delivery service called Acquisition Mail.

Australia Post’s Managing Director, Graeme John, said he’s particularly pleased with the growth in Australian letter volumes.

“The reasons why people are sending letters is changing, but this year’s growth in volumes indicates that businesses are recognising that the letterbox is a really effective channel for reaching consumers – and grabbing their attention,” said Mr John.  “If businesses want results they should be including mail as part of their marketing and communications mix.”

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Background information #2:  Retail & agency services

Australia’s largest retail network

Australia Post maintained the nation’s largest retail network in 2006/07, with 4,449 postal outlets – including 2,553 outlets in rural and remote locations.  This nationwide network served around one million customers every working day, according to Australia Post’s 2006/07 Annual Report.

The revenue and profit earned by Australia Post’s “retail & agency services” business increased marginally in 2006/07 as the business concentrated on refining and evolving the product and service range on offer in postal outlets.  Revenue for the retail & agency services portfolio increased 1.6 per cent and profit increased by 0.9 per cent.

An important development in this portfolio was the growth in identity services transactions conducted on behalf of Australian businesses and government agencies.  The number of identity services transactions increased by 25 per cent and revenue from this emerging area increased by 56 per cent. In total, there were 1.4 million identity-related transactions and 1.16 million passport interviews performed in postal outlets.

The number of agency-based banking and bill-payment transactions declined slightly during the year, mainly as a result of greater uptake of online payment methods.  In total, Australia Post outlets conducted 158 million Postbillpay transactions and 28 million Bank@Post transactions.

The revenue from merchandise sales increased by 3 per cent and profit grew by 6 per cent.  Australia Post introduced several new product lines to its outlets this year, including Smiggle stationery, iTunes, gift cards and travel accessories.

Managing Director Graeme John said he is pleased with the performance of the retail business as it begins to redefine its offer to customers.

“Our research shows that customers enter our outlets to ‘get things done’,” said Mr John.  “So we’ve been gradually repositioning our retail offering to concentrate on the product categories and the agency services that we’re well recognised for.

“People trust us with their mail services, banking and bill paying services and now they’re happy to conduct proof of identity services with us as well.  That shows the strength of our brand.”

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Background information #3:  Parcels & logistics

Strong growth in parcels and logistics

Australia Post’s “parcels & logistics” business provided the corporation’s major highlights of 2006/07 with strong growth in volumes, revenue and profit.  Overall revenue for the parcels and logistics business increased by 9.4 per cent and profit was 16 per cent higher than last year.

All of Australia Post’s parcel products enjoyed healthy volume growth during 2006/07, including domestic parcels (up 3.7 per cent); Express Post parcels (up 9.5 per cent); International parcels (up 8.4 per cent); and Express Courier International (up 9.5 per cent).

Growth in domestic parcel volumes is being driven by the boom in online trading – especially in the areas of wine, electronic goods, CDs and DVDs.

The strong growth in international parcels can be attributed to the success of the KPG Alliance, a global postal partnership arrangement that involves Australia Post, China Post, Hongkong Post, Japan Post, Korea Post and the United States Postal Service. In 2006, Royal Mail (UK) and Correos (Spain) also joined KPG.

A highlight of the year was the launch of the Express Post International Parcels service in September 2006.  This new service offers delivery between most major international cities within three to seven business days, along with priority handling, basic tracking and signature on delivery.

Australia Post’s stated goal is to be the “essential partner” for domestic parcels and logistics services for the Asia Pacific region. In pursuit of this goal, Australia Post has established a joint-venture partnership with China Post called Sai Cheng Logistics International that now operates five facilities in China.  And Post Logistics is offering a seamless end-to-end supply chain for customers operating between China and Australia.

“We are expecting that a significant portion of our future revenue growth will come from parcels and logistics and that’s why we are investing heavily in this area of our business,” said Managing Director Graeme John.

“Given our infrastructure in Australia and our growing presence in the Asia Pacific region, Australia Post is now in a very strong position to satisfy our customers’ domestic and international supply chain requirements.”

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For further information, please contact:
Melanie Powell  03 9204 5362

• See Corporate Information
• Annual Reports