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Irish Times
5 days ago
- Business
- Irish Times
Politicians come worst out of a row over An Post's finances
The axiom that the cover-up is often worse than the crime in politics is generally associated with the 1970s Watergate scandal, which saw the resignation of Richard Nixon as US president. Applying it to the brouhaha over the question of who trashed An Post at Cabinet this week is open to the accusation of being unsporting and using too much gun. But at the same time we have a Cabinet Minister accusing one of his colleagues of leaking details of a briefing he gave on An Post in a deliberately damaging way. The report in the Irish Daily Mail suggested Communications Minister Patrick O'Donovan told Cabinet that the company was on the brink of collapse, with cash reserves of less than €1 million. The paper said that, without the revenue generated by election-related mailing, the company would have made a loss last year. The report so annoyed An Post chief executive, David McRedmond, that he interrupted his holiday in Italy to go on Morning Ireland and paint a different picture : one of a company in rude good health. He said the accounts presented to Cabinet showed revenues of €1 billion for the first time and net profits of €10 million. READ MORE O'Donovan promptly followed him on to the Claire Byrne show on RTÉ radio and somehow managed to agree with McRedmond that the company was in good shape, without saying that the Irish Daily Mail story was wrong. Instead, he turned his ire on his Cabinet colleagues, accusing one of them of leaking a distorted version of his briefing. 'But how a nameless minister or alleged nameless minister or source or whatever, would conflate that [his briefing] into saying this, the situation is dire. I don't know how they will come up with that.' If we take O'Donovan at face value – and we have no reason not to – he has made a very serious allegation that one of his colleagues deliberately broke the law in order to damage a State-owned business that employs 10,000 people, and which is one of Ireland's most trusted brands. And the potential damage is significant, according to McRedmond, who warned it might cause big global customers to lose confidence in the business. As ever the question is: why would someone do this? It is no secret that there are different views on An Post in Government. The briefing document for the incoming Minister in the Department of Public Expenditure, which was released earlier this year, makes the following observation: 'An Post's financial position remains extremely challenging. Mail volumes continue to decline and new services such as parcels are more competitive and hence lower margin. Significant existing State support means there is some ability to address sustainability, but this is limited.' [ Ireland's economic plans threatened amid 'sobering' outlook Opens in new window ] There is no suggestion that the new minister, Jack Chambers , leaked the details of O'Donovan's briefing. His department's position is pretty much word for word the most recent assessment of An Post carried out by New Era, which provides financial and commercial advice to minsters and their department on semi-state company holdings. It is a somewhat different picture from the upbeat one pained by McRedmond, but it is not hard to reconcile them. McRedmond was brought in from the private sector to run An Post in 2016, having previously worked in TV3 (now Virgin Media) and Eir. The focus in the private sector is essentially short term. The future cannot be controlled, and the most important thing is this year's figures. If you were not optimistic you would not be in business. McRedmond said as much on Morning Ireland in connection with the once-off revenue associated with election mailings that flattered last year's figures. 'Yes, we got a big boost from the elections last year, but if it wasn't the elections, it would be something else,' he said. The public sector takes a longer-term and more conservative approach, as epitomised by New Era's assessment of An Post's prospects. McRedmond's sangfroid on its own is not going to cut it for New Era, when it comes to recommending that the Government accede to his request for more capital and higher borrowing limits. McRedmond wants this to further An Post's transformation into a delivery business competing with giants such as DHL and UPS. [ David McRedmond: 'An Post has been brilliant. I've never been remunerated less and enjoyed a job more' Opens in new window ] It is still somewhat baffling why leaking details of a Cabinet meeting would enhance anyone's position in this debate. It's possible, of course, that it's more cock-up than conspiracy. The story was really a nothing burger and only took off after McRedmond's performance on Morning Ireland, which was followed up by O'Donovan's accusations on Claire Byrne. It would not be the first time that the leaking of a titbit to a newspaper had spiralled out of control. But the situation remains that a Government Minister has publicly and emphatically accused an unidentified Cabinet colleague of breaching confidentiality and leaking confidential information in a nefarious manner. That is something that has to be taken seriously.
BreakingNews.ie
7 days ago
- Business
- BreakingNews.ie
Taoiseach expresses ‘full confidence' in An Post
The Taoiseach has expressed 'full confidence' in An Post, adding that Cabinet has had no discussion about the organisation 'being on the brink'. It comes after reports claimed that Arts Minister Patrick O'Donovan told Cabinet colleagues that the postal service would have seen a 'substantial loss' last year without revenue generated by general and European election post. Advertisement An Post chief executive David McRedmond described the reports as 'utter garbage' and said the company is 'performing extremely well'. An Post chief executive David McRedmond (Niall Carson/PA) On Wednesday, Taoiseach Micheál Martin expressed confidence in Mr McRedmond and the board of An Post. Mr Martin said he could understand the chief executive's 'anger and annoyance' over the reports on the company's accounts, adding: 'What happened was wrong.' He told reporters: 'I'm not apportioning blame anywhere, I simply do not know.' Advertisement However, he said: 'There was no discussion about An Post being on the brink or anything like that. 'The company turned a profit last year and had improved its situation significantly from the previous year.' Mr Martin described An Post as a 'very effective company' that under Mr McRedmond's leadership had 'adapted very well to changing trends' in mail, postage and packages. He told reporters: 'In terms of the core business, the company has been very resilient in the face of fairly fundamental change of behaviour. Advertisement 'There will be challenges ahead, and (the) importance is to be able to identify changing behaviours and changing trends, and then position the company to deal with that.' Mr Martin said the overall picture for the company was 'better this year than last year'. Earlier, Mr O'Donovan said he is confident about the future of An Post, describing the company as 'viable and profitable'. Arts Minister Patrick O'Donovan (Niall Carson/PA) Mr O'Donovan presented the postal service's annual report to Cabinet on Tuesday. Advertisement Following claims that An Post is in a 'dire financial situation', Mr O'Donovan said that the postal service has been transformed in recent years under the leadership of Mr McRedmond. Mr O'Donovan said: 'The issue here is quite actually extraordinary. A set of accounts was brought forward by me yesterday to the Cabinet meeting, and I'm not going to breach Cabinet confidentialities because I'm constitutionally prevented from doing that, as is everybody else. 'But obviously somebody decided that that wasn't going to be the case.' Mr O'Donovan told RTÉ's Today with Claire Byrne programme that An Post has returned to profit following some challenging years. Advertisement 'One of the things that has been conflated as well in some of the media reports, which isn't helpful either, and I think David McRedmond set the record straight, as people are conflating An Post with the independent postmasters. 'To be quite honest about it, it is showing, particularly from some politicians, a lack of understanding of what An Post is and a lack of understanding of what an independent contractor who works for An Post is.' Mr O'Donovan added: 'But how would a nameless minister or alleged nameless minister or source or whatever, would conflate that into saying that the situation is dire. I don't know how they would come up with that.' Speaking to RTÉ Radio 1, Mr McRedmond said he was 'absolutely furious' by the claims. 'That report is utter garbage. I'm here in Italy, on my holidays, I'm absolutely furious to read something like that,' he said. 'The company presented its results. The results were presented to Cabinet yesterday. They showed the highest revenue we've ever had, over a billion revenues for the first time. 'They showed that we grew our earnings from €38 million to €55 million. 'They showed that our net profit was at 10 million. The company is performing extremely well. 'We've got the highest level of parcel growth of any postal operation in Europe. So I just don't understand it.' He rejected claims that without profits generated from last year's general and European elections, it would have made a substantial loss. 'It's just simply not true, and it's not how companies work. Yes, we got a big boost in the elections last year, but if it wasn't the elections, it would be something else, and with the elections, we've huge costs with them,' he added. 'It was 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 also rejected claims that cash reserves have fallen below one million euros. 'We have at the end of the year with 38 million cash reserves, and this year, so far this year, we are performing well ahead of our budget, and our budget for this year is to beat last year. 'I'm talking to Government about it. I hope there's just some big misunderstanding somewhere, and the company, as I say, is doing really well.'
The Journal
7 days ago
- Business
- 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. It is not just about maintaining the post office network and the products that go through it. There is also the centralised delivery of mail parcels throughout the country, including Government services,' said Mulvey. Patrick Neary, Assistant secretary in the Department of Communications, said last month that the decline in mail and financial transactions 'puts pressure' on ensuring that the organisation has new areas of revenue, through Government services and parcel delivery. 'We are working very closely with An Post on its strategy and future strategy. We are supported by other Government agencies in that engagement. To say what the future will be beyond five years is probably a little bit of a stretch for us now. I know An Post's strategy, published last year, looked out for the coming five years and we are very much engaged,' said Neary. What does the Taoiseach make of the row? 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. Minister of State Michael Healy-Rae told Newstalk today that the Government has an 'obligation' to protect communities' and its post offices. 'If we don't use it, we lose it,' he said, adding that everyone should use their local post office. Readers like you are keeping these stories free for everyone... A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article. Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation. Learn More Support The Journal
Irish Times
7 days ago
- Business
- 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.
Irish Examiner
7 days ago
- Business
- Irish Examiner
Mick Clifford: An Post is indeed doing fine, but the company's original business is in bad shape
Managing decline is never easy. So it has been with Ireland's post offices. Over the last 30 years or so, the State's network has been reduced from nearly 2,000 to less than 1,000. The decline was inevitable with the flight from rural to urban Ireland. The introduction of the internet condemned what is now refereed to as 'snail mail' to the status of a sunset industry. Then along came the pandemic to accelerate further the migration of business and communication online. That reality is behind the public perception of the current status of An Post. Yet, as the company's CEO David McRedmond pointed out on Wednesday, the network accounts for only around 20% of the company's business. So it is that under McRedmond's stewardship, An Post has accelerated diversification away from mail delivery and into ecommerce and financial services. The result has been a company that returned a profit of €5.6m for 2024, up from a €20m loss the previous year. An Post also had, for the first time, revenues in excess of €1bn. That is fair going for a company associated in the public mind — erroneously — with the dying habit of snail mail. So it was no surprise that poor McRedmond nearly choked on his cornflakes on holiday in Italy when he saw a headline saying that his company was 'on the brink'. He rang Morning Ireland to put the nation right and he let fly. It would be hard to blame him. Presumably, he was expecting plaudits on his return home for the healthy finances instead of reading that he was overseeing a basket case. An Post CEO David McRedmond pointed out that the post office network accounts for only around 20% of the company's business. Picture: Brian Lawless An Post is indeed doing fine. But it is also the case that the company's original business is in bad shape. In line with global trends, mail volumes were down by 7.6% in 2024. Despite that, revenue from mail increased, but that is a scenario that can hardly be sustained. As reported in Wednesday's Irish Examiner, suggestions are being floated that delivery days might be cut. That would be a rational business decision, but one that would induce headaches among some politicians. The post office has been an integral feature of rural, and to a lesser but still significant extent, urban Ireland for centuries. As is often the case, perception, on which much of politics is often based, is very different from reality in this sphere. In 1995, there were 1,839 post offices, which was down by around 500 from 10 years previous. At the last count, there were 960. In the last decade alone, 257 have closed. According to a reply to a parliamentary question from Sinn Féin's David Cullinane, 201 of these were categorised as 'rural' and the remaining 56 as 'urban'. Cullinane described the figures as 'shocking'. 'The local post office plays a vital role in Irish life, providing financial services, access to the social welfare system, communication infrastructure, and community supports,' he said. 'In many areas, they are the only visible expression of the State.' Maybe so, but the reality is that post offices are run as businesses by independent postmasters who are effectively franchisees. The average age of postmasters is pretty high. When retirement beckons these days, there are very few willing to take up the slack. In May, the Irish Postmasters Union commissioned a report from Grant Thornton to map out the future. The consultant calculated that a strategic investment of €15m annually, up from the current €10m, is required over the next five years to stay any further culling from the network. If the money isn't forthcoming, the result would be 'cutting communities off from vital services, undermining national goals for regional equity, social cohesion and financial access', the report said. The report also stated that that the network in Ireland is between €344m and €776m in terms of its annual social and economic value to communities. Post offices are run as businesses by independent postmasters who are effectively franchisees. File picture: Maxwells All of that may be something of a sideshow commercially within An Post. Politically, however, it is the only show in town. No government wants to be associated with what effectively would be further cuts to services particularly in rural Ireland. So it was that, to mix a few metaphors, somebody in cabinet leaked in order to run a flag up the pole, suggesting that palms need to be greased in the name of votes. Whomever could it have been? The minister who brought the report to cabinet, Patrick O'Donovan, said that it certainly wasn't him. One down, 14 ministers and a few super juniors to go. Not only did a minister breach cabinet confidentiality with that leak, they also took it upon themselves to trample all over O'Donovan's well-tended patch. No wonder he was angry at how this leak turned out. By rights he should have got on the phone immediately to McRedmond and they could have shared their anger and mused on how commerce and politics sometimes just don't mix.
