TELECOM VITA DOUBLES NET PROFIT
Written on the 26 August 2013
TELECOM retailer Vita Group Limited (ASX: VTG) has doubled net profit and reported a 32 per cent growth in earnings before interest, taxes, depreciation and amortisation (EBITDA) to $22.1 million in the 12 months to June 30, 2013.
The group encompasses Fone Zone, One Zero, Next Byte, iConcierge, Vita Networks and Sprout Accessories, as well as selected Telstra Shops and Telstra Business Centres.
A full year net profit after tax of $6.2 million and a group revenue rise of six per cent to $434.7 million is the result of a transformation of the group’s store portfolio in recent years.
With the rollout of the Telstra portfolio now well advanced, the Group’s focus has turned to optimising the performance of its portfolio, driving traffic to each location and executing well on sales opportunities.
While revenue and EBITDA from Telstra stores were strong, growing nine per cent and 25 per cent respectively, this performance was offset by a decline in Fone Zone revenue and earnings as store numbers reduced and new investment was directed towards the Telstra portfolio.
The Board declared a full-year dividend of 2.83 cents per share (cps), up 89 per cent from 1.5 cps in the previous period, representing a 65 per cent payout ratio.
Vita Group CEO Maxine Horne says aligning with market leader Telstra has paid dividends.
“The portfolio is generating strong profits and cash, which has allowed for accelerated repayment of debt and a growing dividend stream,” she says.
“Our focus now is on driving maximum value from our Telstra portfolio, lifting the performance of Next Byte and investing in the SME and enterprise market where we have expertise and capability, but lack scale.
“To this end we will be investing in our people, particularly in the areas of leadership, sales execution and customer experience, all of which will drive sales and profitability.”
Vita Group shares remained stable following the announcement at 77 cents per share.