Next Byte scotches strong Vita Group profit
- 22 August, 2014 13:52
Vita Group has reported a $4.6 million full year loss despite the strong the performance of its network of Telstra stores.
The loss was a result of a $19.4 million non-cash impairment, of Next Byte, announced last February.
The impairment charge against Next Byte goodwill reflected changes to footprint expansion plans.
However, underlying profit was $10.3 million - and increase of 66 per cent - while revenue increased four per cent to $450.1 million.
Vita Group chief executive, Maxine Horne, said the FY14 result extended the company track record of earnings growth in recent years following its decision to invest in building Australia's largest network of Telstra-branded stores and business centres.
"Our new and existing Telstra outlets are performing to expectations and continue to generate significant levels of earnings and cash flow, while our move into the B2B channel is gaining traction," she said.
"The FY14 result is testament to the quality of our strategic partnerships and the hard work and dedication of the Vita team.
Next Byte recorded a 17 per cent decline in revenue to $75.2 million, attributed to the closure of a number of older stores, a softer like-for-like performance and the lack of new Apple launches during the period, according to a company statement.
Efforts to stabilise the Next Byte business resulted in a narrowing of its EBITDA loss to $1 million, down from $1.8 million in the previous year.
"Tighter management controls were evident in the in the second half result, which approached break-even," according to a company statement.
"When coupled with Apple product launches planned, these are expected to driven an improved result in FY15."
Vita's telecommunications division recorded a 44 per cent rise in EBITDA to $34.5 million on a 9 per cent increase in revenue to $374.9 million.
This result reflected strength in trading, particularly through Telstra stores.
Vita's Telstra portfolio stands at 109 points of presence, including 14 Telstra business centres.
The company acquired 12 additional stores during the period.
Its earnings from the B2B telecommunications channel increased 29 per cent.
This followed the acquisition of Camelon ICT Solutions in the first half and subsequent integration.
According to a company statement, Vita has improved its offering to enterprise customers with a dedicated management team, clearly defined channels to market and a broader suite of products and services.
The board has declared a final dividend of 0.0273 cents per share, taking the full year dividend to 0.0464 cent per share.
Horne said there remained a number of high quality opportunities for the group.
"Considerable growth potential remains as we integrate newly acquired stores and, through are people development initiatives, lift the consistency of performance across all retail stores," she said.
"We are also now well positioned to stake a meaningful footprint in the B2B market, having integrated the capabilities of Camelon and enhanced our offering to SME and enterprise customers.
"The business channel is a significant opportunity for Vita and we expect and we expect to be generating meaningful earnings growth from this channel over the medium term."