Robust trade
It notched up a 40% increase on the same period last year. Net profit climbed 20%, to R210m.
Yet the organisation is still plagued by recent disputes, including a R274m lawsuit by former CEO Maande Manyatshe for loss of future earnings he claims to have suffered as a result of “defamatory” allegations of fraud made by his successor, former CEO Khutso Mampeule.
Mampeule was subsequently fired by Communications Minister Ivy Matsepe-Casaburri and is fighting for a higher compensation payout for his dismissal.
Members of Parliament’s communications portfolio committee raised concerns at a Post Office presentation yesterday that settlement of these claims could wipe out the subsidy of more than R300m the organisation had from the government this year. The subsidy is supposed to be used for the roll out of infrastructure to provide universal access to postal services.
Post Office chairman Vuyo Mahlati would not be drawn on progress made with Manyatshe’s claim, saying it was in the hands of the company’s lawyers. The process of shortlisting a new CEO was well under way, she said.
Committee members were also concerned about the extent of carry-over of subsidy payments from one year to the next. These amounted to R131m in 2005-06 and R219m last year.
They were told there were planning bottlenecks which delayed spending but great care was taken to ring-fence these funds.
The Post Office is expecting the robust trend, as reflected in the growth in trading profit, to continue in the second half of the financial year, and forecasts an annual 17% increase in trading profit to R549m on the basis of a 7% rise in turnover to R5,4bn. In the 2006-07 year it grew trading profit 85% to R470m (R254m) and its pretax profit by 59% to R507m (R319m).
Chief financial officer Nick Buick outlined the efforts the Post Office was making to diversify business activities away from heavy reliance on mail. A new focus was providing services such as motor vehicle licence renewal, online traffic fine payments and collection of fees for the Com- pany and Intellectual Property Registration Office.
He mapped out the progress made by the organisation, which was technically insolvent in 2002 03 when liabilities exceeded assets by about R1bn. It now had reserves of about R1,2bn, to be used for the intensive investment activity planned.
This year R922m has been approved for infrastructure investment — R542m for property and R326m for IT. About R800m would be spent each year for the next three years to 2012.
At present, the Post Office provides one post office to 14000 people and aims to achieve a ratio of 1:10000.
Buick said the government had committed itself to subsidising the organisation with more than R300m until the 2008-09. A major focus at present, Mahlati said, was to bring structural cohesion to the diverse business activities in the organisation.
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