Mailpac pandemic gains dim
Published:Sunday | February 13, 2022 | 12:06 AMKarena Bennett - Business Reporter
Courier company Mailpac Group Limited has for two consecutive quarters posted a decline in sales revenue, a performance that suggests the extraordinary growth experienced by the company throughout the pandemic might be slowly fading.
Revenues for the fourth quarter ending December 2021 dipped two per cent to $501.7 million from the $512.1 million achieved for the similar quarter of 2020. The earlier quarter – June to September 2021 – showed a steeper decline in revenues for Mailpac, down 11.5 per cent year over year.
“Similar to third quarter, this decline was due to an anomaly in online shopping during 2020 driven by government-mandated limitations on physical movement,” Executive Chairman Khary Robinson said of the company’s December results.
Despite the dip in revenue, Mailpac managed to keep earnings intact by curbing costs, enough to swell its bottom line by 11 per cent to $114.5 million. The company has been spending more cash on enhancing its processing capacity, customer service experience, additional delivery store locations and brand marketing.
At the close of its 2021 financial year, Mailpac recorded earnings of $400 million, 10 per cent down year over year, on revenues that grew marginally to $1.8 billion. The numbers are preliminary and subject to audit verification.
E-COMMERCE GOAL
In response to the changing economic environment, Robinson says the courier company is now looking to reposition itself and is banking on investment projects undertaken during 2021 to achieve its long-term goal of becoming a regional leader in e-commerce fulfilment.
“The company will move on from its investments in infrastructure that was required to meet the spike in the demand from the pandemic and focus squarely on the long-term steady growth expected from participating as the leader in [the] e-commerce industry,” he said.
A grounded travel market and social distancing measures have pushed many commercial activities online over the past two years, and Mailpac was a beneficiary of the growth in courier and delivery services.
So dramatic was its growth that the company raked in earnings of $443 million on revenues of $1.7 billion for FY2020, a performance level it was not projected to hit until year ending December 2022.
The growing demand for courier and delivery services later led to Mailpac signing a deal with retailer PriceSmart. Mailpac also began pumping cash into technological improvements, expanded its delivery fleet and rolled out a prepaid Mailpac ePay MasterCard as a payment option.
Last September, Robinson also announced plans to invest $40 million in new lockers and the buildout of five new stores across the island, in an expansion drive of the international and domestic courier side of its business.
“We have completed relatively all of our capacity improvement plan, including additional stores, processing capacity, customer service capabilities and delivery infrastructure,” Robinson told the Financial Gleaner, adding that Mailpac has added stores in May Pen, Clarendon; at the Whitter Village complex, Montego Bay; and in Old Harbour, St Catherine.
“Through a mix of organic initiatives and acquisitions or investments, we expect Mailpac to efficiently capitalise on the inevitable long-term growth in the e-commerce sector within the Caribbean region,” Robinson said.