Examination of Witnesses (Questions 380
MONDAY 25 MARCH 2002
ROBERTS CBE, MARISA
380. So when you say just under eight billion
is that incorrect?
(Mr Roberts) Yes, it would be incorrect.
381. It is not just under eight billion?
(Mr Roberts) No, it is just over eight billion.
382. 8.4 is quite a lot over eight billion,
it is 500 million, which happens to be the amount of money you
were making a few years ago. Just to be clear: your total revenues
are £8,400 million?
(Ms Cassoni) That is what the forecast for this year
383. What were they five years ago?
(Mr Roberts) I would say they would have been around
£7 billion five years ago, six point something to seven.
384. Six point something?
(Mr Roberts) Yes.
385. They have gone from six point something
to 8.4 billion in the last five years. What has happened to your
costs over the same period?
(Mr Roberts) Our costs would have increased slightly
more than that because in the first period we were making profits,
in the second part of that period we were making losses and I
would have expected our costs to have gone up. We are now at what?
(Ms Cassoni) About the same £8.4.
386. Which is why you are making a loss? You
see the concern again, it goes back to what Mr Osborne was saying
earlier, is that you have been letting costs rip out of control
while faffing around with things like changing your name. How
do you respond to that?
(Mr Roberts) I do not accept that at all. We had one
year when we made losses and in that year we had a large increase
in costs, part of the reason I was starting to explain there.
Some of those costs were within our control, and we put them up
with our eyes open, which was the new package of Working Practice
Changes where we paid an upfront sum to the union, some of them
were outside our control, which was the new agreement with all
the European postal nations which we are under the aegis of the
Commission for which added £137 million to our costs. We
had a decision over automating Counters which cost us nearly £100
million in additional operating costs once that decision had been
taken which was a decision which came out of a Government study.
We had increases in fuel costs. I could take you through the whole
lot to a billion pound increase in costs.
387. I have some figures from Postwatch, the
consumer watchdog, which suggest that over the last five years
your costs have risen by 13 per cent on average while your revenues
have grown by only three per cent. Does that sound about right?
(Ms Cassoni) Over which period?
388. The last five years?
(Mr Roberts) No.
(Ms Cassoni) That is not correct. If I put it differently.
I do not know those figures because I was not here five years
ago but basically over a period of the 1990s the revenues were
growing, principally in the mid 1990s, in real terms at about
four or five per cent and the costs were growing at under two
389. Let us think about cash. Would you mind
sending us a note?
(Ms Cassoni) We can give you the amounts.
390. Would you explain exactly what has happened
in percentage growth terms to the costs and to the revenues over
the last five years. If you could let us have a note about that
afterwards I would be very grateful. Mr Roberts, when you bought
City Mail in Sweden what did you pay for it?
(Mr Roberts) I am sorry offhand I have not got that
figure in front of me. Sorry, I am told £26 million.
391. That was for both the stakes you bought
a few years ago and the increase in the stake?
(Mr Roberts) That was the whole lot.
392. When you sold it to Norway Post, what did
you sell it for?
(Mr Roberts) About £16 million. We lost about
£10 million on that deal.
393. Why did you sell it? It was losing money,
(Mr Roberts) It was losing money in the end, yes.
394. You have had another overseas venture,
have you not, looked at by this Committee, German Parcel?
(Mr Roberts) Yes.
395. How is that going?
(Mr Roberts) That is making money.
396. How much money is it making?
(Mr Roberts) I would rather not say openly because
we are very competitive with both the Germans and the French but
it is low double figure million pounds worth of profit.
397. It is profitable?
(Mr Roberts) Yes.
398. I would like to ask another question on
profit. Postcomm's Report, the main one, on page 34 says all the
routes, different delivery densities, city centre, urban, suburban,
rural and deep rural make an operating profit, is that correct?
(Mr Roberts) I do not think that is so.
399. I have a summary which it gave to the Committee.
It struck me when I read itthis is the summary of the Postcomm
Reportit says "Rural and deep rural locations are
both contributors to operating profit", is that correct?
(Ms Cassoni) I think contributors, ie making a contribution,
is different from being profitable. I think it means it makes
6 Ev, Appendix 2, p 52. Back