Vita Group, the company responsible for Telstra T[life], Fone Zone and Next Byte stores, has released its financial results for the six month period to 31 December 2009. Although operating revenue was down, EBITDA and net profit after tax increased substantially.
The Vita Group achieved an EBITDA improvement of 52 per cent over the period to $13.5 million. However, this result was influenced by an advanced payment by Telstra, after it signed an extended dealer agreement with the company. On a normalised basis, EBITDA was up 5 per cent to $6.6 million.
Net profit after tax was $7.5 million for the period (up 75 per cent) and operating revenue was down 4 per cent to $144.9 million.
This reduction in operating revenue was due to a store optimisation programme that reduced the amount of stores by 19 as compared to the same period last year.
According to the company, the rollout of 25 new T[life] stores is well on track, with five stores opening at 31 December 2009.
“The initial roll-out of the new Y[life] strategy is on track, and we anticipate completing the roll-out of the first phase of 25 T[life] stores by the end of November 2010,” said David McMahon, joint chief executive officer.
McMahon said that its Fone Zone stores are now in a better position after a bumpy couple of years.
“With Vita Group’s store optimisation programme close to completion, the Fone Zone chain is back to business as usual. 53 stores have been closed over the past two years, with one relocated and three new stores opened,” he said.
“The changes, together with the operational improvements put in place, have stabilised Fone Zone store numbers and better positioned the business for the future.”
McMahon was also pleases with the turnaround of Next Byte.
“We continue to work on the turnaround of the performance of Next Byte,” he said. “We are responding by providing an enhanced retail experience, whilst focusing on the service and corporate segments where Next Byte can truly differentiate itself.”
McMahon was very optimistic about the financial outlook for the Vita Group.
“Vita Group’s key focus over the remainder of the 2010 financial year will be on the roll-out of the T[life] stores and enhancing the profitability of both Fone Zone and Next Byte,” he said.
“We will continue to implement operational improvements within our retail formats to further grow earnings and position our stores for growth.”
The Vita Group expects EBITDA for the full year to be in the range of $17 million to $18 million.