Optima loses $5 million in six months

By Chris Nicholls

SYDNEY: Digital City owner Optima has posted a $5.1 million loss after tax for the half year to 31 December 2007, citing a New South Wales Department of Education policy change that eliminated them as an education supplier.

However, the negative results also included a $940,000 loss from the Digital City chain, and overall revenues from all channels were down 37 per cent to $26.2 million

Optima claimed the Digital City business had experienced positives since its acquisition, despite the otherwise negative news, saying the company had rebuilt the customer base with four major print catalogues and other advertisement in the Christmas and New Year period, and also ‘significantly’ increased sales and gross margin.

Optima said Digital City would return to profit in FY09, thanks to improvements in floor management and product mix and range.

Costs were also down 17 per cent over last year, the company said.

Cornel Ung, company chairman, said he remained confident, despite the large losses.

“We expect there will be a transition period ahead of us, and we feel confident that the retail direction that we have started will lead Optima ICM into a profit zone in the not too distant future.

“The group is forecasting a reduced loss in the second half of the 2008 financial year, as compared to the first half, and that it will return for profit for financial year 2009,” he said.

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