The ASX-listed owner of Next Byte and Fone Zone, Vita Group (ASX:VTG), has announced a strong half-year rise in net profit despite a 4 per cent drop in operating revenue. However, the company's Apple reseller business is dwindling with plans to shut down three stores by mid-year.
According to Vita Group CEO, David McMahon, the Apple reseller chain, Next Byte, is still suffering. There are 22 Next Byte stores nationally.
“We continue to work on the turn around of the performance of Next Byte,” he said. “We are responding by providing an enhanced retail experience, whilst focusing on the service and corporate segments where Next Byte can truly differentiate itself.”
For the year ending December 31, 2009, the group recorded a net profit of $7.5 million, up from $4.3m in the previous year. Operating revenue fell from $151m to $144.9m year-on-year.
McMahon said the second calendar half of 2009 had signalled a turning point for the company. Current staff numbers were slashed 22 per cent compared with December 2008.
“The first half of the 2010 financial year has been a period of significant transition for Vita Group,” he said in a statement. “The key development was the finalisation of the new dealer arrangement with Telstra.
“The initial roll-out of the new T[life] strategy is on track, and we anticipate completing the roll-out of the first phase of 25 stores by the end of November 2010.”
The positive news comes as Vita Group completes its major restructuring. Fifty-three Fone Zone stores have closed over two years.
The company also predicted capital expenditure of $5-6m in the first calendar half of 2010 as it rolled out more T[life] stores.
Vita Group shareholders welcomed the result. Company's shares were up 7.14 per cent at the close of trading on February 25.