Vita Group has made another revenue record-breaking year for FY20 and has signalled its intent to make acquisitions in the financial year ahead.
Despite the impact of COVID-19, Vita recorded a revenue rise for the financial year year ending 30 June of 2.6 per cent to $773.1 million, up from FY19's record-breaking $753.7 million.
However, its net profit after tax (NPAT) declined by 7.7 per cent, to $22.4 million, which is off the back of FY19’s 10 per cent increase, to $24.3 million.
Earnings before interest, tax, depreciation and amortisation (EBITDA) also increased by 9 per cent, to $49.9 million, according to a statement to the Australian Securities Exchange (ASX) by the publicly-listed company.
The results were strong enough to flag the goal of improving its store portfolio in FY21, aiming for selective acquisitions, organic growth and divestments within its ICT business.
While no details regarding future ICT acquisitions were provided, there was evidence this financial year of an appetite to acquire, with two acquisitions in FY20 taking place, involving Telstra stores in Whitsunday and Lismore, which settled on 1 August and 28 February, respectively, for a combined $3.5 million.
In terms of generated revenue, these acquired businesses totalled earnings before interest and tax (EBIT) of $731,182 from acquisition date to end of FY20.
Maxine Horne, CEO Vita Group, labelled FY20 as having a “very solid result in an unprecedented year”.
“Our achievements are, more than ever before, a result of our dedicated and hardworking Vita peeps, who have shown flexibility and commitment and have acted in line with our Vita values,” she said.
“While COVID-19 will undoubtedly continue to impact Australia and our economy in FY21, our highly capable team, strong balance sheet, and clear strategy for growth should maximise our ability to successfully and responsibly deliver value over the long-term.”
The results were due to a strong performance in Vita's ICT business up to March, growth and improved productivity in its skin-health and wellness (SHAW) business, and its response to the coronavirus pandemic, according to the ASX statement.
For its ICT business, revenues increased 2 per cent, to $752 million, and EBITDA was up 7 per cent, to $84.9 million.
A part of that revenue, at $122.2 million, was derived from a single external customer, the group’s FY20 financial report noted.
Retail ICT was up 5 per cent while device revenue was labelled as “strong”, especially in the face of the global pandemic and its accessories brand Sprout “continued its positive contribution to growth and profitability”.
Meanwhile, its SHAW revenue was up 47 per cent, to $20.1 million, and EBITDA was up 49 per cent to a loss of approximately $1.9 million, improving from FY19’s loss of $3.7 million.
During the financial year, it also exited the men’s athleisure sector, leaving its SQDAthletica brand.
Looking to FY21, COVID-19 is expected to challenge the business in the near future and as such will continue to focus on its core ICT and SHAW businesses.
Particularly in its ICT business, it sees its partnership with Telstra to be of “key importance”, while Sprout is expected to continue delivering profit.