Renaissance sales fall, predictions 'hazardous'

Wednesday 5th August 2009

Listed Apple reseller Renaissance Corporation suffered in the six months to June 30 as recession-hit sales fell away and the company absorbed the costs of discontinued business and roll-out costs for new stores.

Renaissance today reported an 87.4% decline in net half-year profit after tax to $280,000, compared with $2.1 million in the same period last year.

It is pinning its hopes on an improvement in trading conditions and expects still to better last year's full year result, despite carrying over business discontinuation costs of $396,000 from last year and making an anticipated trading loss in the first six months of $528,000. That was despite roughly static sales for the period of $94.6 million.

"Predictions are reasonably hazardous because our annual result depends so heavily on the December quarter of the year," the company said in a statement to the NZX. "We are targeting a profit before tax of between $1.7 million and $2 million. This should give an EBITDA of between $4 million and $4.5 million and would represent a lift on our 2008 result.

"Provided we meet our growth targets, we will consider resuming dividend payments following the end of the financial year."

Adding back interest and non-cash expenditure of depreciation and amortisation (EBITDA), June 2009 earnings were $1.672 million - down 50% from $3.404 million in 2008. The company reduced net debt from $4.737million last December 2008 to $2.825millionand further bank debt reduction remains a focus.

Businesswire.co.nz

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