TTA Limited, the publicly listed company that owns and markets the TEAC brand in Australia, has reported a $4.4 million net loss after tax in the first six months of the 2014-15 financial year.
This is compared to a net profit after tax of $653,833 in the previous corresponding period. The business was hurt by reduced margins caused by providing retailers “incentives” to move a surplus of stock and a $2 million goodwill write-down.
Net revenue declined 35.7 per cent compared to the same six month period in 2013, from to $26.6 million to $17.1 million.
According to the ASX statement from the company, “This was due mainly to the slower response by our retailers towards certain new products launched ahead of market, as well as incentives offered to retailers to reduce excessive inventory. The excessive inventory has largely been cleared.”
The figures were announced days after the news that longstanding CEO James Phoon will be departing the company in the New Year.
TTA was cautious about the outlook for the remainder of the financial year, stating: “The retail of consumer electronics products in Australia remains challenging. While the Australian dollar had fallen in recent months, the competitive nature of the industry had prevented TEAC Australia from increasing prices to maintain its profit margins. TEAC Australia will continue to focus on its efforts in progressively taking cost reduction incentives in the current financial year.”