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- Vita Group (VTG) managed to maintain an overall net profit despite a drop-off in revenue according to the retail group’s half-yearly report
- The ASX-lister collected $323.7 million during the first half of Fy21, marking a 25 per cent decrease on the prior corresponding period
- Net profits managed to pull through, however, which the group attributes to a solid performance in its skin health and wellness channel and a $12 million JobKeeper subsidy
- Looking forward, the company says it is well prepared to respond to the wind-up of its 25 year-long partnership with Telstra, which was announced earlier this month
- Vita is up 7.43 per cent following the announcement, trading at 94 cents each
Vita Group (VTG) managed to maintain an overall net profit despite a drop off in group revenue according to the retailer’s half-yearly report.
The ASX-lister collected $323.7 million during the first half of Fy21 representing a 25 per cent decrease on the $431.6 million it picked up on the prior corresponding period.
Vita cited the impact of COVID-19 on the information and communication technology (ICT) channel as reason for the decline.
Group gross profits took a 17 per cent hit, however, net profits rose 27 per cent from $14.5 million to $18.4 million, which the group maintains is due to strong performance and growth in the skin health and wellness channel, Artisan.
The channel delivered a solid performance over the period increasing revenues by 37 per cent on the prior year to $15.1 million. ICT revenues were down by 27 per cent, however, with earnings before interest, tax, depreciation and amortisation (EBITDA) dropping seven per cent.
The company also received $12 million in federal government JobKeeper subsidies, which VTG accredited as being “instrumental” in supporting declining revenues over the period and propping up underlying earnings before interest and tax (EBIT).
EBITDA and EBIT clocked in at $32.6 million and $28.1 million, respectively.
Vita ended the period with net cash of $30.2 million after directing cashflows towards Telstra store acquisitions, paying down debts and lease payments.
The company is preparing to shell out a fully franked interim dividend of 5.6 cents per share on April 9 of this year.
In most recent news for the company, key client Telstra revealed it would be transition to full ownership of all of its stores, bringing an end to Vita’s 26-year partnership with the telecom giant.
Vita says it is well prepared to respond to the retail ICT changes and has affirmed it will continue to grow its Artisan business in the skin health and wellness sector.
Vita is up 7.43 per cent following the announcement, trading at 94 cents each at 2:30 pm AEDT.
