By Paul Hayes
SYDNEY, NSW: The Thorn Group has bucked the recent retail trend and posted a $16.4 million profit for the year to 31 March 2010, a 32.8 per cent increase on the previous year.
The recorded net profit for the Thorn Group, operators of Radio Rentals and Rentlo, was actually $19.5 million, but the total net profit ended at $16.4 million when normalised for a one-off tax benefit of $3.1 million.
The positive numbers come as the rest of the Australian retail industry struggles with downbeat sales figures, as the economy cycles out of last year’s stimulus payments and a string of interest rate rises. This was evidenced by Clive Peeters’ entry into receivership last week following a run of poor sales results.
But Thorn has shown there is life in the retail industry yet, but not necessarily in sales.
“Despite a soft retail market, the main driver of Thorn’s performance has been an 8.8 per cent increase in customer numbers for the core Radio Rentals and Rentlo business,” said the company.
Thorn has attributed much of the customer growth to its ‘Rent, Try, $1 Buy’ offer, which it believes has appealed to people without mortgages and who are therefore less affected by rising interest rates.
“Our customers are showing there is strong and growing demand for our ‘Rent, Try, $1 Buy’ offering and our responsible rental and lending policy has meant lower customer arrears and bad debts,” said managing director, John Hughes.