Mr. Dermot Divilly:

I regard the financial position as the key because everything else flows from that. Mail has declined by 34% and is declining by about 5% per annum. For every 1% decline, that is €4 million or €5 million in turnover, so it is quite significant. We have to adapt the company to that new low level, which is largely outside our control. With e-business and other changes, people are not writing letters like they used to. Our big customers are the utility companies and the banks and they are driving everybody online. Therefore, it is not just a once-off challenge; it is a rolling situation and every year, the turnover will decline.

I see it as a very big challenge that requires a transformation of the company, and that is where I see the viability.

I understand rural Ireland very well and I grew up in rural Ireland. There is no immediate wish whatsoever on my part or the part of the existing management to reduce the number of post offices. Six post offices closed last year and in all cases it was because they could not get an alternative. I know the common view - I had it myself - that there was a drive to close post offices. That is not a major factor in the financial stability of the business; it is much more a question of the deliveries. We are a very large employer, by any standard, given we are up near 10,000 staff, and we have the cost of that on a declining turnover.

There is not one silver bullet, in my opinion, and I am quite experienced at this because I have done it and am quite confident I can do it with the help of the management. It is a question of adapting one's costs. It is like the time of austerity, when we all had to adapt. We have to adapt our costs and we have to get some further increase in price to the European average, which I mentioned. There are very few things in Ireland which are below the European average but the letter delivery system, through a large rural network, is one of the few. In addition, we have to sell more through our post offices.

To give the committee an idea of the position, 26% of post offices account for 60% to 70% of the turnover, so it is very biased towards the bigger post offices. The bigger post offices have a greater capability to sell insurance. We are now one of the bigger operators in currency, which is quite an achievement as this was traditionally dominated by the banks. We sell gift cards and have subsidiaries in that area. We sell a lot of products, but there are only so many of those we can sell, and they are often sold only in the larger outlets because the smaller outlets cannot do that. Therefore, the larger outlets are probably subsidising the smaller outlets.

We are absolutely committed to implementing what was recommended in the report by Mr. Bobby Kerr. There is a steering committee in place at present and we will implement that report. It is absolutely in line with our thinking that we must drive more turnover, reduce our costs and get more revenue for our product. Those are the three things we-----