ISLE of Man Post Office has reported a profit of £2.49 million for 2010/11.
It is up from a profit of £1.7m the previous year.
In September it was announced a pay agreement had been reached between the Communication Workers’ Union and the Post Office.
Workers will receive a 3.5 per cent pay rise but there will be job cuts to fund it.
It ended a dispute which started in April 2010, when staff were told there would be no pay rise due to the government’s pay freeze on salary budgets.
Half of the profit will be returned to Treasury as a levy.
For 2011/12, the Post Office says it expects its key challenges to be a continuing decline in physical mail, changing social trends, an ageing customer base and increased competition.
Post Office chief executive Mike Kelly said: ‘Our core business remains under immense pressure and so our diversification into new products and international markets becomes even more important to us.
‘Whilst these strategies are in their infancy, Isle of Man Post Office is gaining a reputation of being innovative with specialist knowledge particularly in the new areas of scanning and data capture. It is pleasing that many of our new customers are coming from off island allowing us to further contribute to the fiscal benefit of the island.’
New products include the launch of ePostbox, which enables customers to fully access and manage their physical post online.
The Post Office report will be laid before Tynwald at next week’s sitting.
Chairman Alan Crowe MLC said: ‘The results for the last financial year are pleasing particularly as Isle of Man Post Office continues to operate in a very challenging industry with physical mail volumes continuing to decline.
‘I would like to thank all our customers for their continued support. We pride ourselves in offering one of the lowest postage rates in Europe and the highest standards of service to our customers.’
Post Office vice-chairman Geoff Corkish MLC is due to take over the role of chairman from Mr Crowe, subject to Tynwald approval next week.
The Examiner approached the Communication Workers’ Union but officials said they wanted to study the report before commenting.