BotswanaPost-BSB merger set for March 2011

FREDERICK KEBADIRETSE
Staff Writer | Friday December 17, 2010 00:00

 

News of this is contained in the recently released BotswanaPost annual report: 'As at the close of the year, the form that the merged entity will take was beginning to take shape,' says the report in the Chairman's statement.

'This development is a source of excitement to us at the Post as it will serve to propel our aspirations of becoming an icon of excellence.'

The report further states that the merger will provide an opportunity for growth of the group and will help put the Post ahead of many participants in the Postal World.

'We are active participants in the teams that have been created by the government to drive the merger and like the rest of the key stakeholders, we are optimistic that the target of March 2011 will be reached,' it says. The merger will bring on a new organisation and has the potential to change the structure and form of the group. The development is the result of recommendations from a rationalisation strategy for public entities developed by the Public Enterprises Evaluation and Privatisation Agency in December 2006.

The strategy was sought to address issues of overlapping or related mandate, similar client base among public entities. Government approved the strategy this year and it was announced in the 2010 Budget that the merger of identified public entities would go ahead before the end of the current financial year.

In the review period, BotswanaPost revisited its business strategy to align it with that of its major competitors that have been offering similar services more efficiently, banks. BotswanaPost shifted from its traditional mandate of mail delivery to other communication services like the Internet, quick and easy money transfers and parcels delivery. Regarding financial performance, Chief Executive Pele Moleta says the company again failed to break even due to a challenging environment resulting in a loss of P13 million.

'Our targeted performance for this year was going to be driven by foundational interventions aimed at preparing ground for faster growth in the ensuing years,' Moleta explains.

'Due to a very challenging market environment, inadequate sales resources and sub-optimal tariffs, we were not able to reach our target of a break even position.'

Revenues across the Group were flat compared to last year, while costs grew by 20 percent. Moleta says the cost of sales was contained at similar levels as the previous year.

Bottom-line performance also dropped because the subsidiary, Botswana Couriers, was not able to meet its own profit targets owing to myriad reasons, including below target revenues by 30 percent and above target costs at 17 percent.

During the year, Botswana Couriers experienced a high turnover of sales personnel that impacted negatively on revenues while unexpected legacy tax issues resulted in large cash outflows. Moleta says the outlook for the subsidiary is very positive as the improvements introduced in the ensuing year are expected to generate far better results. 'While our profit performance is wanting, we are gratified by the fact that we were able to mobilise two of our flagship projects for this year which were part of our deliberate effort towards hinging levers for growth,' he says.

As at the close of the year, construction on the Gaborone Mail Processing Centre was delayed. However, it is expected project completion and fitting of equipment will be realised within the first half of the 2011 financial year.

The Poso House Refurbishment Project was awarded to Project Managers by the end of the year to work on the designs, culminating in the identification of contractors and construction project supervision.

The project will convert Poso House, the head office, into a modern building with a three-level parkade. Close to 50 percent of the space will be leased as another source of revenue. Envisaged completion of this project is December 2011. A related project, the Gaborone Central Post Office building development, was put in abeyance until the next year.