After announcing profits of £1.6 million for the last financial year, Guernsey Post has announced it is to install a £1.8 million parcel sorting machine. This is to help the carrier meet the changes in demand from being a postal to a parcel carrier.

The new automated parcel sorting machine will be able to process up to 6,000 parcels an hour. It is to be installed in July as part of general plans to update the mail operator’s HQ.

Due to the investment, Guernsey Post has said it will make a short term loss. Boley Smillie, chief executive, said: “The company is embarking on a multimillion-pound investment, funded from our own reserves, which includes the redesign of its postal headquarters and the installation of fully automated parcel sorting equipment.”

Guernsey Post’s finance director, Steve Sheridan, said: “We are excited to invest in this new parcel technology, which will enable Guernsey Post to be more efficient and grow our capacity.During the pandemic, Guernsey Post experienced strong growth in parcel volumes to levels that we would not have otherwise anticipated to reach for another three or four years. Our existing forecasts suggest that this growth will continue for the foreseeable future, albeit at a slower rate. However, the parcel growth is in stark contrast to the decline of core letter revenue which continues to fall by more than 10% per year.”

As with all postal operators, the carrier is facing a softening of volumes thanks to energy price inflation that is in turn causing an uplift in labour cost demand. This will impact future revenues, but the investment is for the long term and not short term issues.