Hays DX moves into profit before post dispute

Business mail delivery group Hays DX has moved into profit even ahead of the current postal dispute, according to accounts filed recently.

Hays DX (Ireland), which operates a document exchange, courier service and business mail delivery, recorded an operating profit of €154,000 in the year to the end of June 2003. That is a significant turnaround on losses of €56,000 in the previous financial year.

The profit, which amounted to €107,000 after tax, allowed the company reduce accumulated losses to €50,000 and managing director Mr Kevin Galligan is confident those will be wiped out this year.

"When I first arrived about two and a half years ago, the company was going through a difficult time but that has now turned around and this year looks to be substantially better than last year, even before the postal dispute," he said.

He said the company had made a strategic decision to protect existing customers during the current dispute. As a result, it is taking on only customers who are prepared to sign up for a one-year contract.

"The strategy we have is to sign up customers that we can hold on to," said Mr Galligan.

This policy means that An Post is unlikely to regain all its business when the current dispute is settled, exacerbating its present financial difficulties.

And, while Mr Galligan acknowledged that the growing standstill in the State postal system was bringing new business, he argues that the dispute is not universally good news.

"From our point of view, it has been a good opportunity but it is not good for the postal sector, which includes us," he said. Disputes would only encourage businesses to look at alternatives, including electronic transfer of information.

Hays DX was founded by solicitors in Dublin during the postal strike in 1979, which lasted about four months.

They used a network of legal offices and couriers to keep open the lines of business communication. Hays, the British support services group, acquired the business in 1996.

The company, which employs 36 people, had a turnover of €5.4 million last year. Income comes largely from subscriptions from companies across various sectors, including law, financial services, insurance and property.

It also numbers several State bodies among its client base, including the Office of the Director of Public Prosecutions, the Chief State Solicitor's Office and the Land Registry.

Costs are dominated by courier services, which it uses to ensure mail dropped off at specific locations by 5 p.m. in the evening is delivered nationwide before 9 a.m. the next day. Courier services cost the group just over €3 million in 2003. This was slightly down on the previous years as the company pared costs, including staff numbers.

Bad debts amounted to €264,000 in the year to June last, according to the accounts.

Hays estimates it currently handles between 2 and 3 per cent of the Irish business mail. "As the Irish market begins to deregulate, we will look to grow our business and market share," Mr Galligan said.