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poBe99)9th
99/106 to 119 POST OFFICE BOARD
Minutes of the meeting held at 148 Old Street
on 26 October 1999
pr Neville Bain Chairman
john Roberts Chief Executive
Richard Close Group Finance Director
Jemy Cope Group Managing Director Strategy & Business
Development
Mike Kinski Non-Executive Member
John Lloyd Non-Executive Member
miles Templeman Non-Executive Member
Rosemary Thorne Non-Executive Member
Jonathan Evans Secretary
Scott Childes Notes
Richard Dykes, Group Managing Director, Mails Services
Stuart Sweetman, Group Managing Director, Customer and Banking Services
Kevin Williams, Group Managing Director, Distribution Services
Others attending: Bob Peaple, Director Personnel & People
Management, for POS9/412
John Modd, Managing Director International Services,
and Chris MacKenzie-Grieve, Acquisitions Manager,
for PO99/113
Vanessa Leeson, SCS Programme Director, for
PO39/114
JONATHAN EVANS On behalf of the Board the Chairman welcomed
Jonathan Evans to his first meeting as Secretary.
MINUTES OF PO99/106
PREVIOUS MEETING
The Board noted a change to minute PO99/97(iii), the
Gemini project, which had been circulated to Members.
Approved this change and the minutes of its meeting
of 14 Septernber 1999.
MATTERS ARISING POS9/107
POB(99)64
Board Effectiveness (i) The Chairman and John Roberts would review the
{Pog9/89) proposed list of matters reserved to the Board prepared
by the previous Secretary. The final document would then
be circulated to Members.
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Action (0) The Secretary, having taken on board comments from t
Secretary Chairman and Chief Executive, to circulate the revised list
of matters reserved to the Board
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CHAIRMAN’S PO99/108
BUSINESS
(i) The Chairman had two issues he wanted the Board to
address: business performance, which would be covered
during the meeting, and Government's failure to address
and respond to important issues that affected the
operation and management of the organisation. A list of
these outstanding issues had been produced and would
be raised with senior Government officials at a meeting
arranged for the following week. inadequate processes,
an increased workload and the arrival of a new and
inexperienced Minister were all believed to be contributory
factors in the delays that were occurring
CHIEF EXECUTIVE’S PO99/109
REPORT (POB(98)65) prv-vrrvrrrrrr rrr nner i
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vy) Customer Complaints. Some short term improvements to
deal with problems identified in the handling of some
customer complaints at customer service call centres had
been identified, Further work, in liaison with the Customer
Management Business Unit, would seek to develop longer
term improvements.
(wi) Horizon. Following remedial work around two issues that
had previously prevented acceptance (POS9/91), the
system had now been accepted with implementation
proceeding at a rate of 200 offices per week. Rollout
would continue until 8 November at which point it would
cease until January thereby allowing a period of analysis
and assessment of implementation to date to be
undertaken. When implementation re-commenced it
would be at a rate of 300 offices per week
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FINANCIAL Pogsiitt
RVIE
ovel {i) Provisional Profit/loss results for September were
¢ Royal Mail £16.1m;
* POCL £563m (of which £562m was the Horizon
write-off);
¢ Parcelforce £(4)m
i) The current full year forecasts were:
* Royal Mail £421m;
e POCL £22m (excluding Horizon);
* Parcelforce £(8)m;
(iii) The half year results would show a loss of £(420)m after
tax, including the impact of the Horizon write-off. Royal
Mail's result, whilst slightly above budget at £134m, was
down against the £218m achieved last year. This was
primarily the resuit of the tariff increase the previous year.
Whilst Parcelforce’s result was £5m better than the
£(17)m loss last year, this did include a £17m benefit from
Special Delivery.
(iv) DTI officials were aware that the half year and full year
results would show a loss as a result of Horizon but it was
doubtful that Ministers had yet been briefed on this. The
results would be likely to provoke renewed press
comments on Horizon and the background to the
Government's decision. This would require a careful
internal and external communications strategy by The
Post Office.
(y) There was some suggestion emanating from DTI that the
Horizon write-off should be treated in the accounts in
such a way as not to give rise to a Post Office loss.
However, the Board unanimously agreed that the only
correct treatment of the Horizon write-off was for it to pass
in full through the Profit and Loss account.
(vi) Following September's Board meeting, Royal Mail's full
year profit forecast had been reviewed with ail risks and
opportunities rigorously assessed. As a resulta balanced
forecast of £421m was now proposed although internally
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(xv) Excluding Horizon, there were no serious issues within
Counters.
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(xvil) The poor performance of Parcelforce and Royal Mail’s
adjusted full year forecast should be refiected within the
Group's full year profit figure reported to DTI. Richard
Close would determine what this figure should be. It might
also be prudent to include a separate line indicating the
exceptional cost of the Horizon write-off.
(xviii) (Secretary's note: Richard Close subsequently agreed
that the following full year profit figure would be reported
to the DTI:
« £340m
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APPOINTMENT OF A POS9/118
DIRECTOR OF POST
OFFICE FINANCE
LIMITED AND POST
OFFICE
INVESTMENTS
UMITED
(POB(39)71x)
10) The Board noted that David Cromwell would resign from
the Boards of Post Office Finance Limited and Post Office
investments Limited with effect from 26 October 1999.
(ii) Agreed the appointment of Roger Raymond Durrant as a
Director of Post Office Finance Limited and Post Office
Investments Limited with effect from 26 October 1999.
DATE OF NEXT PO99/119
MEETING
The next meeting was scheduled for 30 November 1999,
at 148 Old Street.
106 123
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