By Sarah Falson
SYDNEY: Car entertainment and mobile phone dealer Strathfield said it is working on an executive incentive scheme following reported profits for the half-year to December 31, 2006 of $91.2 million, which is up 5 per cent but doesn’t match profit forecasts from March last year.
The group decided to change is franchise model in March 2006, announcing it would franchise 62 of its 87 stores, which was meant to produce an annual cash profit for the group of more than $10 million when fully-operational.
However, net profit after tax for the above period fell short of Strathfield’s goal, reaching only $3.3 million. Even so, this figure is still $6.7 million more than sales results from the corresponding period the year before when the group lost $3.4 million.
“The improved profit was driven by margins reflected in Comparable Store Margin growth of 9.2 per cent, an improved product mix and the impact of franchising roll-out which totalled 12 stores at 31 December 2006,” said a spokesperson for the Strathfield board.
To date, 12 franchise stores are operating, with the rest to follow as the company approves suitable applications.
“Strathfield’s chief executive officer, Mr Gerard Frack, said he was pleased with the improved performance of the company owned stores and the continuing roll out of the franchise model,” said the spokesperson.