Isle of Man Post Office has recorded a half a million pound loss.

But latest accounts show that increased turnover and significant cost savings have reduced losses from £661,638 in 2018-19, to £504,346 in 2019-20 - and the Post Office is on track to return to profit by 2023-24.

Chairman Julie Edge welcomed Treasury’s decision not to impose a levy of £500,000 in the year due to the financial restraints facing the authority.

Chief executive Simon Kneen said on a like-for-like trading basis the results were well ahead of the year before and were ’testament to our strategy, which is seeing significant costs eliminated from the business’.

Outlining in her chairman’s statement the challenges facing the post service, Ms Edge said letter volumes were in ’irreversible decline’, with 17.4m items compared to 19.3m in 2018-19.

But the reduction of letter deliveries to five days a week from October had ’achieved efficiency and environmental benefits’ she said, with further gains to come from a further final revision of postal round duties.

Meanwhile, the parcels market remains highly competitive in the island but while parcel volumes increased in the year, this did not compensate for the loss in letter mail.

Ms Edge took a swipe of private courier firms for under-cutting the Post Office.

She said: ’The unfettered "gig economy"continues to have a detrimental effect on our business which significantly lowers the cost of entry in this market, making it difficult to compete on a level footing.’

Ms Edge said the Post Office has submitted a response to the Chief Minister’s committee tasked with looking at zero hour contracts and she remained optimistic that an independent review will be undertaken in the coming year.

Despite the ongoing challenges, the Post Office has extended its parcels hall to handle greater volumes.

The accounts show that the Post Office’s retail network reported a loss of £1.25m for the year, a similar figure to the previous year.

Ms Edge said that for more than 20 years, the size, cost and scope of network of sub post offices had ’placed demand on the resources of the organisation and is increasingly threatening its self-financing status’.

’Commercial profits generated elsewhere in the business simply cannot offset the increasing losses incurred from operating the retail network as it stands today,’ she said.

Ms Edge said the strategy for the retail sub post offices is forecast to help the authority return to profit by 2023-24.

The accounts show that two Post Office employees earned between £100,000 and £124,999 during the year.