Vita Group profits take a dip

Vita Group profits take a dip

Retail group remains optimistic about FY12 performance with help of Telstra and Apple brands

ASX-listed retailer, Vita Group (ASX:VTG), has recorded a 12 per cent dip in net profit to $6.8 million for the 2011 financial year ending June 30.

The dip was put down to a lower reported EBITDA, which was down 4 per cent to $18.5 million, as well as slightly higher depreciation, amortisation and interest costs relating to the Telstra store rollout program.

During the 2011 financial year, 38 new Telstra stores were established. Vita Group plans to open another 30 points of presence in the next 12 months.

It operates four retail brands including Fone Zone, Next Byte, One Zero Communication and Telstra stores.

Operating revenue was up 33 per cent for the company totalling $386.9 million. This resulted from like-for-like store sales growth within its telecommunications division, which experienced a 48 per cent increase in revenue to $251.2 million. Fone Zone was up 40 per cent and Telstra stores increased 41 per cent.

Growing demand for Apple products saw Next Byte sales grow 18 per cent for the year. However, EBITDA was down, generating a loss of $700,000.

In a statement, Vita Group, said Next Byte was a key priority and it had put a platform in place to lift its profitability in 2012.

Some of the initiatives include growing pre- and post sales solutions through iConcierge, introducing higher margin products, and growing sales within enterprise and education channel.

In partnership with Apple, it will expand its retail footprint with a new look format.

During FY11, five underperforming stores were shut down, parts of the operation were consolidated and one new store was established.

Vita Group joint CEO, David McMahon, said the group’s revenues demonstrated strong growth in a difficult retail market.

“While Next Byte’s revenue has grown strongly despite a smaller retail presence, there remain a number of areas for improvement in that business,” McMahon said.

“Our focus over the next 12 months will be rolling out the third phase of our new Telstra store program, optimising the Fone Zone business, and improving the Next Byte operation and retail footprint.

“Vita Group’s alignment with two strong market-leading brands, Telstra and Apple, should ensure a positive outlook for FY12.”

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Tags retailAppleTelstravita groupnext byteFone Zonemobile solutionstelecommunicationbsOne Zero Communication

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