Thorn Group, which owns Radio Rentals, says it lifted earnings in the year to March as Australian rented more appliances.
The company told the ASX yesterday that profit for the year to March 31 rose 58.2% to $19.5 million, compared with $12.3 million a year earlier.
Net profit was $16.4 million when normalised for a one-off tax benefit of $3.1 million, the company said.
Thorn said this result means the group has doubled profit since its listing three years ago.
"Normalised net profit after tax is up 32.8% compared to $12.3 million for the previous year, reflecting resilience of the combined retail and financial services business model," the company said in the statement.
Revenue grew 14% to $145.1 million.
Final dividend was boosted from 2.91c to 3.76c.
This takes full year dividend to 6.32c, up 32% from 2009.
The company said that despite a soft retail market, "the main driver of Thorn’s performance has been an 8.8% increase in customer numbers for the core Radio Rentals and Rentlo business, as more people chose its "Rent, Try, $1 Buy" offering as a means of accessing an increasing range of household goods.
"Overall customer numbers increased 10.5%." CEO, John Hughes, said in yesterday’s statement.
Thorn said it had found that the increased demand has been "generated by many of its customers not having mortgages, leaving them less affected by rising interest rates and, in current economic conditions, preferring to rent rather than buy goods. There is also emerging evidence of more people with mortgages preferring to Rent, Try, $1 Buy!"
The company said that all rental product categories experienced higher demand in the year, with whitegoods providing about a third of new installations, audio visual and computers 40% and the remainder across furniture and gym equipment.
"Margins have been maintained by Thorn having efficient access to customers, with some 70 per cent of inquiries being made by telephone and online, supplemented by its 70 stores nationally.
"Other contributors to improved performance were historically low late payments, allowing staff to be more focused on business growth, more contracts going full term and higher levels of repeat business.
"Our customers are showing there is strong and growing demand for our "Rent, Try, $1 Buy" offering and our Responsible Rental and Lending Policy has meant lower customer arrears and bad debts," Mr Hughes said.
Thorn shares finished down 1.5c at $1.115 which wasn’t a bad result given the selling pressure all day yesterday and the 3% fall in the market.
