Vita warns of Apple supply hit amid coronavirus

Vita warns of Apple supply hit amid coronavirus

Half year revenue grows by 14 per cent, although business IT division suffers

Credit: Dreamstime

Telstra’s retail partner Vita Group has warned its supplies of Apple products may take a temporary hit as the coronavirus continues to spread in China.

The publicly listed reseller flagged “potential short term or timing risks” in its ICT retail and accessory division, warning Apple devices in particular could be “constrained”.

The virus COVID-19, which has affected both Salesforce and Ciscos’ upcoming Australian conferences, may also cause “potential impact” to Vita’s accessories supplies, although the retailer stressed the situation was being “actively managed”.

The company however noted its sales of the South Korean Samsung’s products would remain unaffected. 

Vita issued the shareholder alert as part of its 2020 half year results, which saw its overall revenue grow by 14 per cent year-on-year to $431.6 million.

Its ICT business also grew by 13 per cent for the period ending 31 December, but only its retail and accessory arm performed well, growing by around a fifth.

Meanwhile, its business ICT division saw revenues sink by more than half following Vita’s recent decision to exchange “legacy” network remuneration for a greater retail store presence.

Although the move cost it $13 million in lost sales, the company reassured shareholders its growth in the retail ICT division had offset that growth. 

Vita claimed it it would now devote more time to its more profitable mid-market segment. Its balance sheet also revealed that ICT earnings rose by 9 per cent, as gross profit dipped by 2 per cent to $109.5 million.

According to Vita, the margin rate reflected a higher proportion of devices and accessories in the sales mix.

The retailer also extended its ongoing Telstra dealer agreement and master licence for a further year, meaning the arrangement will now carry on until 30 June 2025.

"Our team continues to perform strongly, and we remain committed to supporting Telstra in achieving its strategic and operational objectives,” Vita CEO Maxine Horne said. “Vita's relationship with Telstra now extends to 25 years and reflects the confidence Telstra continues to place in our team's ability to execute and out-perform.”

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Tags AppleTelstraciscosalesforceVita


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