New CEO eyes profitable Post Office

The SA Post Office was put under administration in November last year after a protracted four-month illegal strike. Picture: Emile Hendricks/Foto24
The SA Post Office was put under administration in November last year after a protracted four-month illegal strike. Picture: Emile Hendricks/Foto24

Johannesburg - Possibilities exist for the beleaguered South African Post Office (Sapo) to be profitable again, said the state-owned unit’s new chief executive officer.

On Thursday, Cabinet approved the appointment of Mark Barnes as the Group Chief Executive Officer of the South African Post Office (Sapo). Barnes’ five-year term at Sapo starts on January 15 2016.

He is currently the biggest shareholder and executive chairperson in investing and trading solutions company Purple Group.

An Actuarial Science honours degree graduate from the University of Cape Town, Barnes has had leadership experience in financial services at Standard Bank, Capital Alliance and Brait, according to the Purple Group website.

Now he faces one of his biggest challenges yet: Turning around a state-owned Sapo that has had leadership instability and which is in financial dire straits as it reported a preliminary net loss of about R1.1bn earlier this year.

In an interview with Fin24, Barnes briefly shone a light on how he intends to make Sapo profitable again - a feat achieved in 2009 when it recorded a pre-tax profit of R488m.

"In the beginning we might require some support but in due course that business should stand on its own and be hugely profitable,” Barnes told Fin24.

"I can't see valid reasons why we can't return to that world,” he said.

Barnes said the Post Office needs to start looking at “delivering more than just letters” as he pointed to how postal services in countries such as Italy have been transformed.

"In Italy, you'll see that their revenue is not like ours which is close to 70% on mail, but it's more like 30% and they are very involved in businesses like logistics ...and the like,” Barnes told Fin24.

Barnes further emphasised that he wants to strike a “new accord between government, labour and business”. And within that relationship, he wants new ideas to proliferate Sapo.

"I put the case to government that if you were just to think about reducing the size of it, just rationalising an old-fashioned business, you just end up with a smaller old-fashioned business,” he said.

Barnes is set to take the reins at Sapo after former CEO Christopher Hlekane’s contract was terminated in September 2015 amid allegations of mismanagement of funds.

Hlekane also left Sapo during a months-long strike that knocked postal services in 2014. The strike ended in November 2014 but was followed by Sapo’s board resigning in that same month.

Government then subsequently put Sapo under administration while Trevor Ndlazi took over from Mlu Mathonsi as acting group chief executive officer in October this year. A handover is expected to take place from Ndlazi to Barnes, according to the Ministry of Telecommunications and Postal Services.

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