Jersey Post has released its 2022 business review today, reporting a 46% decline in gross margin and a £ 6.6 million loss. The review confirms that the company has faced significant pressures from multiple external factors, which, when combined, have created ‘the perfect storm’.
Rising inflation has also led to changes in consumer behaviour, causing increased caution around spending. This trend has had a notable impact on eCommerce, with Jersey Post reporting a decrease in parcel volume of 9% in 2022. 19 days of Royal Mail strike action also had a detrimental impact on volumes and revenues in 2022 which resulted in a 20% decrease during peak.
To illustrate this point, Jersey Post Chair Alan Merry stated, “Our operating model is simple: we generate revenue and profits by moving goods, parcels, and mail around the world. Three factors affect our bottom line: the volume of items moved, the margin we can make on each transaction and the costs we incur in fulfilling our service. Volume has a direct impact on margin, and this is felt more acutely in a low-margin business such as ours.”
However, the business has a robust strategy which has supported efforts to minimise financial losses and ensure that the business puts itself in the most stable and resilient financial position possible for 2023. Its Philatelic division has reported more robust sales and higher margins than in any other year. There also remains great potential in its digital business, Vaiie, which develops RegTech and verification services for government and financial services, and in Woodside Logistics, which experienced a 43% increase in freight services in 2022.
Despite the financial losses experienced in 2022, Mr Merry was confident that the business is in a good position and is making headway in 2023. In particular, the business appointed a new CEO in June 2022.
“Mark has extensive experience of the global logistics and mail industry and has a track record of driving business forward. His leadership has been vital in supporting our diversification agenda and navigating the incredibly challenging operating conditions we face,” stated Alan Merry.
There is no doubt that 2023 continues to pose some significant challenges for Jersey Post, but it will also hold opportunities. With great confidence in its workforce both locally and around the world, the business will continue to build and grow the diversified businesses and will further establish its presence and expertise across the multiple jurisdictions in which it operates.
