CWU slams Post Office boss 'hypocrisy'

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Post Office chief executive Paula Vennells has come under sharp criticism after her 20 per cent earnings increase was revealed in the company’s official financial report.

The controversial boss, who is currently presiding over a programme of office closures and mass redundancies, was awarded a total reward package of £619,752 for the 2015/16 financial year.

This included basic pay, bonus and a £62,500 cash payment in lieu of pension, according to the statement released by the company yesterday.

CWU assistant secretary Andy Furey said that the news “exposes the crass hypocrisy of the person at the top of this organisation.

“At a time when the network is in crisis, and some 2,000 Post Office workers are facing the loss of their livelihoods, it’s quite unbelievable that the most senior individual responsible for this mess has been rewarded to such an extent.

“Taken together, Ms Vennells and her chief financial officer were paid a combined £1.13 million in 2015/16 – while jobs are being cut across our Admin, Crown Network and Supply Chain operations and our members’ defined benefit pension scheme is being closed to future accrual.”

Thousands of Post Office workers are currently voting on industrial action against the company’s plans and for a new national agreement committing all sides to work together to save the company and build a positive future.

“News like this sends a message to our members that those at the top of the company are only concerned about making money for themselves,” Andy continued.

“Ms Vennells should spend more time working with this union to create a better future for all, and a bit less time counting her money.”

Voting in the industrial action ballot closes on Friday 19th
Read a CWU summary of the Post Office’s annual report here

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Post Office Limited
Annual Report and Financial Statements 2015/16


Overview

On 3rd August 2016 Post Office Limited published their Annual Report and Financial Statements for 2015/16. Chief Executive Paula Vennells stated: “The results show that we are heading in the right direction and making steady progress towards commercial sustainability.”

Total revenue decreased by £25m (2.2%) because of the planned reduction in the Network Subsidy Payment (NSP) from Government. Revenue grew in Financial Services and Telecoms by 4.8% and 8.3% respectively. This included a 19.7% revenue increase in Personal Financial Services to £152m. Revenue from Mails and Retail declined by 2.1%, compared with flat revenue the previous year.

Both cost cutting and investment have emerged as priorities for the Post Office. The Annual Report noted continued investment was needed for the transformation of the branch network, whilst simultaneously emphasising an ambitious goal of cost reduction. The NSP from Government reduced by £30m to £130m in 2015/16.

Key figures for 2015/16 compared to the previous financial year:

Turnover was up 0.5% (or £5m) to £981m, whilst revenue (once the Network Subsidy Payment is included) dropped 2.2% (or £25m) to £1,111m;
Total costs decreased by 2.8% (or £28m) to £1,041m. People costs were down by 2.1% (or by £5m) to £233m driven mainly by efficiency savings, whilst other operating costs were down 2.8% (or by £23m) to £808m driven largely by lowering postmaster remuneration costs;
Operating profit before exceptional items increased by 1.94% (or by £2m) to £105m;
Operating losses before depreciation, amortisation, exceptional items and Network Subsidy Payment (EBITDAS) reduced by 57.9% (or £33m) to £24m;
Crown Post Offices have moved from a £46m annual loss to a breakeven position over a four year period;
Net cash flow decreased by 37.4% (or £75m) to £109m. The cash and cash equivalents amounted to £712m (down from £821m in 2015) at the year-end. The inflow in 2015/16 was driven by the BIS loan balance of £155m, with net debt from borrowing from BIS rising by 50% to £465m;



Mails and Retail

Overall Mails and Retail revenue declined 2.1% (or £8m) to £380m. This was driven by a planned reduction of £7m in the fixed fee part of the contract with Royal Mail Group;
Home shopping returns performed strongly but revenue from lottery tickets declined.

Telecoms

Overall Telecoms revenue increased 8.3% (or £8m) to £130m;
HomePhone and Broadband services annual revenue increased by 9.6% (or £11m) to £126m;
Revenue from E Top-ups and phone cards dropped 20% (or £1m) to £4m as more people moved away from pre-paid to contracts.

Financial Services

Overall Financial Services revenue increased 4.8% (or 14m) to £304m;
Personal Financial Services turnover increased by 19.7% (or by £25m) to £152m. This was primarily driven by increased turnover from new insurance intermediation activities undertaken by Post Office Management Services Limited, and through growth in savings and international money transfers;
Turnover from traditional Financial Services products, such as bill payment, declined by £11m;
NS&I premium bonds ceased to be available from Post Offices from 1 August 2015;
Offsetting reductions within traditional products was an increase in banking revenue of £3m with a 10% growth in transactions.

Government Services

Overall revenue from Government Services declined 9.2% (or £13m) to £128m;
DVLA turnover decreased by 50% to £10m as customers increasingly use the internet for vehicle licence payments.

Other income

“Other income” is generated primarily from the Supply Chain business that manages and distributes cash for Post Offices and for third parties. Revenue increased by 5.4% (or £2m) to £39m, with Supply Chain revenue falling by £3m.

Further information to note

People costs decreased by 2.1% (or £5m) to £233m (2015: £238m) net of an increase to pension costs of £2m;
The balance sheet pension position moved from an asset of £205m at March 2015 to an asset of £196m at March 2016;
Costs from the Network Transformation programme decreased by 5.98% (or £18m) to £283m;
The revenue generated by the Supply Chain business has fallen by £3m as the relatively high cost base made it difficult to attract and retain external customers. Supply chain staff decreased by 10.7% (or 164) to 1,360;
Crown Office staff decreased by 1.8% (or 62) to 3,344.