Singapore Post Limited (Singpost) has issued a clarification on articles regarding a potential sale of its Australian business, as reported in the Australian press. 

 

On June 21, the group announced that Singpost appointed Merrill Lynch Markets Australia as financial advisor to formulate optionalities for the group&rsquo s Australia business specifically.

 

In its Sept 18 bourse filing, the group says that the review by Merrill Lynch Markets Australia is still &ldquo ongoing to determine the most appropriate range of optionalities&rdquo for the group&rsquo s business in Australia. 

 

The group adds that there is currently no certainty of any transaction. 

 

Further announcements are expected to follow subject to material developments. 

 

A partial stake sale may also be in the works, according to UOB Kay Hian.

The Singapore Post&rsquo s (SingPost) review of its Australia business could result in possible merger and acquisitions (M& A) or a future IPO.

SingPost management is currently undertaking a review of its Australian business, likely to be done by September 2024. It is unlikely that SingPost will divest of its Australia business given its huge growth potential, said UOB Kay Hian (UOBKH) analyst Llelleythan Tan Yi Rong.

&ldquo In our view, some potential outcomes from the conclusion of the review include a partial stake sale with strategic partners, merger and acquisitions or a future IPO of the Australian business,&rdquo Tan said in a report.

The revenue and operating profit of SingPost&rsquo s Australia business grew during Q1 FY2025 or April to June 2024, on the back of the full quarterly consolidation of Border Express.

&ldquo Moving forward, we expect Border Express to significantly boost segmental annual operating profit in FY25, coupled with organic growth from the Australian business. Potential upside may come from better cost synergies from the integration of CouriersPlease and FMH holdings,&rdquo Tan said.