Sharechat Logo

National Mail reveals extent of red ink

By Phil Boeyen, ShareChat Business News Editor

Friday 22nd December 2000

Text too small?
Troubled mail delivery service, National Mail (NZSE: NML), has reported it lost $7.55 million dollars in the year to the end of June, more than doubling last year's deficit.

The company announced ten days ago was getting out of the mail delivery business due to a poor result but had not made any figures available until now.

The net deficit of $7.55 million compared with a forecast loss of $5.45 million. It includes writing off development expenditure of $324,000 but doesn't reflect the cost of ceasing the mail distribution operations, which are due to end tomorrow. Total revenue for the year was $2.52 million.

National Mail says costs relating to ceasing mail its distribution operation are yet to be finalised, but include redundancy payments, the cost of meeting contractual obligations, any loss on realisation of fixed assets and the cost of managing the mail distribution closure process.

Shareholders will be told the total of trading losses subsequent to balance date at the company's AGM in February.

The company says in spite of the high fixed cost of maintaining the mail distribution network it did manage to offset the decline in revenue against that forecast through cost reductions. However, these were not significant enough to contain the deficit to that forecast.

"The result was also impacted by the decision of the Directors to write off the development expenditure. The Directors are disappointed with the outcome for the business and are taking all steps possible to preserve shareholder funds," the company said in a statement.

The company floated earlier this year, raising $12.7 million, but was unable to compete effectively against market leader NZ Post.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.