3 Apr 2014

Localist sold at loss by NZ Post

9:24 am on 3 April 2014

New Zealand Post has lost millions of dollars from the sale of its directory business, Localist.

The business has been sold through a management buyout led by Localist chief executive Christina Domecq.

The state-owned company would not disclose the sum but Radio New Zealand News understands it was bought for several million dollars.

Localist was founded in 2010 as a subsidiary of the New Zealand Post group.

Its inception was as a print business directory for Auckland, and it is understood that its first few years were problematic.

New Zealand Post tried to improve the company and it has been moved to a more digital platform. However, Localist required more attention and more money.

NZ Post chief executive Brian Roche said there had been encouraging signs for Localist during the past year but it was not part ot the organisation's future strategy.

Over the four years of its existence, New Zealand Post lent Localist nearly $31 million and wrote off $28 million.

It is understood the loss to New Zealand Post over the lifetime of the business will be in the early $20 million mark, after the cost of the sale is taken into account.

New Zealand Post said the sale was a good outcome for both organisations.

One of the people behind the buy-out of Localist, GPG, Summerset Group and Tourism Holdings chairman and former New Zealand Post director Rob Campbell, said Localist had made historic losses but was in a strong earnings growth phase.

He said the business was a leader in the small-to-medium business market in providing full service digital marketing services, and its original core local business was also expanding strongly.