An Post on the brink -- but cabinet sources warn there will be NO bailout
Communications Minister Patrick O'Donovan has briefed the Cabinet on the bleak financial realities facing the State's postal service.
The Cabinet was told that without the significant once-off revenue generated from election-related posts last year, when general, local and European elections were held, the organisation would have made a 'substantial loss'. Communications Minister Patrick O'Donovan has briefed the Cabinet on the bleak financial realities facing the State's postal service. Pic: Leah Farrell/RollingNews.ie
Political sources insisted last night that there would be 'no bailout' for An Post despite its deteriorating long-term financial wellbeing.
A Coalition row could be brewing, however, with Minister of State and Independent TD, Michael Healy-Rae, who is also a postmaster, advocating for more funding for the network. Postage revenue has collapsed in line with mail services in other countries.
A recent analysis by consultancy firm Grant Thornton found that, between 2019 and 2023, the level of mail processed by An Post dropped by 25%. Political sources insisted last night that there would be 'no bailout' for An Post despite its deteriorating long-term financial wellbeing. Pic: Dirk Hudson/Shutterstock
Latest company accounts for the company show that cash balances decreased from €45.7million in 2022 to €11.3million in 2023. The boost from the elections masked this with a spokesman for An Post saying their final position was €38million in cash balances.
An Post's Annual Report for 2024 will be laid before the Oireachtas tomorrow, having been presented to Cabinet yesterday.
One Cabinet minister told Extra.ie that the organisation was facing a 'dire financial situation', which was highlighted by cash reserves dropping below €1million last year. An Post's Annual Report for 2024 will be laid before the Oireachtas tomorrow, having been presented to Cabinet yesterday. Pic: File
A separate Government source said last night that 'a decision will have to be made on whether we are willing to fund it or not and what it looks like in a digital age'.
New Economy and Recovery Authority (NewERA), who provide financial and commercial advice to Government ministers and departments, have been actively involved with An Post in assessing its financial future.
'They still have a mail infrastructure for an old-style postal service, so that will be subject to review,' one Cabinet source said. An options paper has yet to be provided to Mr O'Donovan, but one is expected 'imminently'. A spokesman for An Post told Extra.ie that their balance sheet is 'strong with little debt', and that small loans from the European Investment Bank and Bank of Ireland are both 'being fully serviced'. Pic: RollingNews
A spokesman for An Post told Extra.ie that their balance sheet is 'strong with little debt', and that small loans from the European Investment Bank and Bank of Ireland are both 'being fully serviced'.
They added: 'The company has reduced its debt significantly in the past two years – by €48million – including the repayment of a Government loan of €30million from its own resources.
'At December 2024 year end the company had spare cash resources of €38million and undrawn bank facilities of €30million, ensuring it had working capital facilities for its trading operations.'
An Post operates as a commercial entity and does not receive State funding. However, the post office network, most of which are privately owned and run by postmasters under contract to An Post, receives a €10million annual subvention from Government.
An Post is currently in negotiations with the post office network, with the existing contract between the pair, which sees post office providers paid per transaction, expiring this month.
In May, the Irish Postmasters' Union, representing the post office network, made a submission to Government in which it insisted the current €10million in annual funding 'is no longer sufficient'.
The submission by Grant Thornton described the postal network as being 'at tipping point' as they sought a €5million increase in their annual funding.
'The current annual Government investment of €10million, while welcome, is no longer sufficient to secure the network,' the report said.
Speaking to Extra.ie last night, Seán Martin, president of the Irish Postmasters' Union, said that 'up to 400 post offices' would face closure without the increase in funding.
'Speaking at the Oireachtas Committee on Communications, Minister of State at the Department Charlie McConalogue said that 'we're very committed to continue to support the post office network' through the budgetary process.
However, he said this was being done through the €10million allocation. The row has the potential to place the two main Coalition parties on a collision course with the junior coalition partners of Independent TDs.
Minister of State at the Department of Agriculture and Independent TD for Kerry, Mr Healy-Rae, told Extra.ie last night that 'the constant delivery, excellent service, outreach, [customers] entitled to a service every day – from a social point of view… we'll be advocating for €15million'.
Mr Healy-Rae said that the retention of the existing model of service delivery, which sees post delivered five days a week in addition to other services provided, has support across the political divide.
Asked if the Government should support An Post if it was no longer economically viable, Mr Healy-Rae said that he hoped that it could be 'made to be viable by directing more business through it'.
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The Journal
an hour ago
- The Journal
War of words breaks out on the airwaves between An Post boss and a minister — what's going on?
THE CEO OF An Post was pretty 'furious' on the radio this morning. Fast forward a few hours and a Government minister was out on the news denying that he leaks from Cabinet. So why has a row broken out over An Post? Well, it began with Cabinet ministers yesterday discussing An Post's future. Ministers were briefed that the while profits were up in the organisation, there has been a fall off in mail. Ministers were told that the Department of Arts, Culture and Sport is to consider a number of proposals, including a system whereby post might not be delivered daily and there might need to a consolidation of distribution centres. Senior ministers said their impression of the discussion was that next day delivery for letters was no longer tenable, but as one minister told The Journal today: 'An Post is always under pressure.' The Irish Daily Mail also reported today An Post is facing a 'dire financial situation', alleging that cash reserves dropped below €1 million for the first time. This, in particular, appears to have irked the An Post boss, David McRedmond, who picked up the phone to call RTÉ's Morning Ireland while he is on his holidays in Italy. He told the radio programme that he was furious over what he described as an 'irresponsible leak' by 'a Government minister' relating to the company's finances. 'I'm here in Italy, on my holidays, I'm absolutely furious to read something like that,' he added. 'The results were presented to Cabinet yesterday. They showed the highest revenue we've ever had, over a billion in revenue for the first time. 'They show that we grew our earnings from €38 million to €55 million. They showed that our net profit was €10 million,' he said. So annoyed was the An Post boss, that the organisation released its annual report early, publishing it today. A few hours after McRedmond's radio appearance, O'Donovan, who is responsible for An Post, was out on RTÉ Radio One also, claiming that the leak did not come from him. He added that he is satisfied that An Post is in good financial standing. Advertisement What does the future hold for An Post? Debates around the future of the postal service in Ireland are not new. For over a decade now, the organisation has been seeking more funding to keep post offices open and delivery services operational. Just last month, An Post was before an Oireachtas committee making this very point. Redmond told the committee that he is 'really confident about the future of the post office network'. An Post exceeded €1 billion in revenue for the first time in the company's history, he said at the time. 'There is always difficulty with mail volume decline but we are growing a load of services,' he said. Chairman of An Post, Kieran Mulvey told the committee that he had every confidence in the future of the post office, stating that An Post is 'highly competitive', particularly for parcels. 'That is a significant growth area for us. We operate on a multiplicity of fronts. 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The Taoiseach was asked about the back-and-forth between O'Donovan and McRedmond, stating that there was no discussion yesterday about An Post 'being on the brink or anything like that'. Micheál Martin said that the company turned a profit last year. 'My main message here is we have full confidence in An Post. I have, as Taoiseach. I've witnessed first over the last decade, the manner in which the company has changed. And changed effectively, I believe, and has adapted very well to fairly disruptive change… 'The company has managed that very well and has managed its human resource change very well also. I was disappointed with the thrust of that story this morning because I don't think it reflects the strength and resilience in the company.' What next? Well, any funding An Post is looking for from the Government will be thrown into the pile of asks ahead of October's budget. 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Irish Times
an hour ago
- Irish Times
An Post chief ‘absolutely furious' at Cabinet leak as Taoiseach expresses ‘full confidence' in company
An Post has insisted its company balance sheet is 'strong, with little debt' following media reports saying Cabinet was briefed this week on a bleak financial situation facing the organisation. The State's postal service has said its finances and business strategy was 'seriously misrepresented' in parts of the media. As a consequence it published its annual results in advance of a planned announcement later this month. The 2024 annual statement shows its revenue exceeded €1 billion, representing a 10.6 per cent increase from 2023. Is debt reduced by €5 million to €34 million. An Post chief executive David McRedmond expressed his fury on Wednesday at an 'irresponsible leak' by 'a Government Minister' on the finances of the company. READ MORE Patrick O'Donovan, who holds one ordinary share in the company as Minister for Communications, later denied he was the source of the leak and insisted An Post is a 'very viable' and 'profitable' business. Reports in two newspapers said Cabinet was told on Tuesday that An Post would have made a substantial loss were it not for significant one-off revenue generated from election-related post last year when general, local and European elections were held. Mr McRedmond said this is 'simply not true'. 'It was an irresponsible leak from a Government Minister, which is wholly unacceptable. These are not the actions of a responsible shareholder. The company is doing really well,' he told RTÉ Radio 1 on Wednesday. 'I'm absolutely furious to read something like that. The company presented its results; the results were presented to Cabinet yesterday. They showed the highest revenue we've ever had, over a billion in revenues for the first time.' [ An Post €3 million branding campaign is first since 2019 Opens in new window ] Mr McRedmond acknowledged that An Post received a boost from the elections last year but said that if it had not been the elections 'it would be something else'. He also denied a claim that the organisation's cash reserves fell to below €1 million. Later, Mr O'Donovan denied he was the source of the leak and he said he agreed with comments made by Mr McRedmond that it was unacceptable. The Fine Gael Minister said he brought An Post's accounts to Tuesday's meeting and would not break 'Cabinet confidentialities'. He added that Mr McRedmond is 'absolutely right' and that 'An Post has been transformed over the last number of years under his leadership'. Asked why someone in Cabinet would brief journalists that An Post is in an 'awful state', Mr O'Donovan replied: 'Maybe if the person who said that put their name in the paper, you should be asking them.' In a statement, An Post said it is a 'self-sufficient' State company, receives no Government subsidy and 'never has'. [ David McRedmond: 'An Post has been brilliant. I've never been remunerated less and enjoyed a job more' Opens in new window ] The company has reduced its debt 'significantly in the past two years' – by €48 million – including the repayment of a Government loan of €30 million from its own resources, it said. 'At December 2024 year end the company had spare cash resources of €38 million and undrawn bank facilities of €30m, ensuring it had working capital facilities for its trading operations.' Taoiseach Micheál Martin said the leak 'wasn't good for the company'. 'I can understand [Mr Redmond's] anger and annoyance at what he read today, and I'm not apportioning blame anywhere, I just simply do not know,' he told reporters. 'What happened is wrong ... There was no discussion around An Post being on the brink, the company turned a profit last year and had improved the situation significantly from the previous year.' Mr Martin said his 'main message' was that the Government had 'full confidence' in An Post. 'So I was disappointed with the thrust of that story this morning, because I don't think it reflects the strength of innovation and resilience that is within the company,' he added.
