National Mail angry at NZ Post

Just before Christmas National Mail announced it was stopping its mail delivery business because of a lack of sales.

At its AGM today chairman Richard Flower explained the company's demise to shareholders and said although it managed to pick up a number of large accounts, they were not enough to become profitable.

He says business here weren't familiar with the concept of changing mail suppliers, and claims NZ Post went to extreme lengths to retain their major business customers by offering very substantial discounts and other attractive contract conditions.

"They cut prices to the bone to keep us out.

"In fact, their efforts to protect their customer base went so far that your company felt it had clear grounds to lodge a complaint with the Commerce Commission for anti-competitive behaviour.

"We understand the Commission has instigated a review of competition in the mail industry."

Mr Flower says although the company was losing money towards the end of last year, it remained hopeful that discussions with international organisations would bear fruit.

"Had this eventuated, your company may have acquired the financial muscle, and other help, to carry on and succeed with its plans.

"But when the talks finally came to nothing in mid-December, and with no reason to believe the revenue situation would turn around in the near future, your directors reluctantly made the decision to cease trading with the mail operation, in order to preserve the remaining assets of the company as far as possible."

Mr Flower says since December the focus has been on reducing operating overheads and realising fair value of assets.

Staff numbers at the company have been reduced from 200 to five, and that will reduce further when CEO Antony Fowler leaves at the end of the month. Director and shareholder Paul Meier will become acting chief executive.

Mr Flower says the company is now actively seeking to sell assets, including a computerised mail sorting machine, which could realise a total of up to $1 million.

The company also has around $1.8 million left in cash, and future options include acquiring another business or returning capital to shareholders.

Mr Flower says the company also has a potential value as an entity listed on the NZSE.

"Your directors recommend that the current process of reducing liabilities and selling assets continues, while simultaneously exploring whether there is a potential buyer for the company and its listed status, and assessing any possible trading prospect for the company."

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