Jersey Post looks for profits internationally
JERSEY Post has been continuing with its diversification strategy and its 2017 results reflect the change in the business with a 20% increase in turnover, and a 25% increase in gross profits – the highest level for nine years.
Meanwhile, traditional mail volumes have plummeted and continue to decline, dropping a further 5% last year, although the parcel market increased by the same amount, helped in part by a new relationship with Amazon.
Last year was the eleventh full year of trading as an incorporated company. It has been a difficult period with the loss of Low Value Consignment Relief heavily impacting turnover, combined with the decline of general postal traffic. Chairman, Alan Merry said: ‘We now view ourselves as a “global logistics business that delivers mail” rather than the other way around.’ Mr Merry continued: ‘Over the past 18 months, we have acquired two UK businesses and made strategic investments in a web-based “parcel marketplace” company and logistics business in the US and Hong Kong which has created an international network that is unique in the marketplace.’
The business has had to seek new revenue streams to be able to counter the nearly 65% loss in mail volume and to ensure it meets its Universal Service Obligation.
During 2017 the business has expanded in the US, Estonia and China and invested in the technology that provides online marketplace delivery solutions around the world. This is reflected in the fact that 30% of revenues were generated internationally and this is expected to grow by a further 20% this year.
The international strategy is focused on securing access to higher margin business globally and they’re achieving this through the creation of an international network which will provide crossborder solutions to both local and international customers. Locally Jersey Post has also been working with businesses to provide logistics solutions.
The report highlights the challenges ahead, including the fact that major postal operators around the world are recognising the need to be more agile, which puts further pressure on smaller operators such as Jersey Post. The company has also had to respond to a number of changes in policy by Royal Mail and these, and other factors, are out of the control of Jersey Post.
The States of Jersey will receive a dividend of £691,000 for 2017.