Guernsey Post’s profit for the year to 31 March 2010 was £1.2m, but this was reduced to £0.162m by ‘exceptional items’ – pension provisions and the product write-off of £860,000 on developing a savings bank.

The company’s turnover rose to £45.4m.

As well as the ‘exceptional items’ the company notes in its annual report that dealing with the Office of Utility Regulation was a ‘major drain’ during the year, amounting to nearly £1m.

The rise in turnover was put down to strong growth in priority services and UK and International bulk mail volumes.

Chief Executive Gordon Steele (pictured) said that the company has faced one of the most challenging years in its history: ‘In the last year, we have had to address some very significant issues including a year-on-year 16% decline in traditional mail volumes, large Royal Mail price increases, the frustration of our efforts to diversify into financial services and the ongoing and costly dispute with the Office of Utility Regulation.

‘Issues that arose this year will impact us even more in the next 12 months and actions are being taken now to execute and drive the required efficiency improvements and cost reductions to protect the future viability of the business.’

• Reaction to the annual report and more details in tomorrow’s Guernsey Press