Optima gets back into the black
- 30 August, 2007 17:13
Local manufacturer, Optima, has crept back into the black, recording an after-tax profit of $580,000 on revenues of $80.1 million for the year to June 30. The revenue figure is 15 per cent less than its 2006 result of $93.9 million and is a far cry from the vendor's 2005 full-year revenues of $125.9 million.
Chairman and managing director, Cornel Ung, blamed Optima's shrinking retail business and tougher state government conditions for the decline.
"Last year, we decided to move away from the retail business model and supplying products to the mass merchants to refocus on government and education," he said. "These customers give us a better gross margin as they are looking not just for hardware but also integration and desktop management services.
"We also lost revenue as the result of losing some education business in Queensland last year."
Ung said the decline in revenue and losses had been stabilised, but pointed out the company faced ongoing challenges as the average selling price of desktop PCs continued to fall.
"Selling prices have come down significantly across desktops, which means we have to sell more to deliver the same revenue moving forward," he said. "The retail business was a significant contributor in the past. We decided to move away from that and expected revenues would drop as a result. However, our gross profit margin has risen despite this."
Earlier this year, Optima cut its workforce by 25-30 staff to reduce operating costs. Ung said it had completed reworking its business model and was now looking to expand its direct retail practice.
The focus for the coming year was on identifying retail acquisition opportunities and expanding its 3Cshop reseller initiative to serve consumer and SMB customers, he said. The company currently has 60 stores participating in its catalogue business nationally as well as 150 3Cshop members. Optima sells a range of third-party vendor hardware including branded desktops and notebooks.
Ung was also confident its state government business would continue to grow as a result of securing places on the recent Victorian and NSW whole-of-government PC panels.