SingPost’s Australia review could lead to M&A or future IPO

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

The Singapore Post’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.

“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,” Tan said in a report.

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

SingPost’s Australia and Singapore businesses drove its revenue to a 22.4% YoY growth to S$494.8m in Q1 FY2025. Operating profit was S$24.4m, double that in Q1 FY2024 or April to June 2023.

“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,” Tan said.