Still in retailing and Thorn Group (TGA), the rental and credit provider has reported flat earnings at $28 million, despite recording a record level of rentals and revenue in the year to March 31.
The company reported a 12% jump in revenues to $2-3 million for the year, but the cost of new product development meant profit growth was non-existent.
Despite that the market liked the result (which was a contrast to the update from Fantastic) and the shares jumped more than 6% or 13c to $2.26.
TGA YTD – Market Ticks Result
CEO John Hughes says the rental side of the business continued its strong performance.
"A lot of our customers may have a blemish on their credit history, which means they can’t get other means of credit," he said in yesterday’s announcement.
"It could mean their circumstances are changing and they need the flexibility, particularly if they’re going through a change in their relationship or they’ve had to readjust because of a loss of a job."
Mr Hughes said furniture was its most popular product, especially bedroom and lounge pieces, with the number of rentals increasing by 46%.
Overall, Radio Rentals increased its number of rentals by 6% in the year.
Looking to the coming year, the company said it was "positive Thorn will deliver future profit growth. This is based on an expected continuation of a solid performance of its core rental business as well as growing returns from investments and initiatives as the Company evolves into a broader based financial services organisation."
Final dividend is up 9% to 6c a share, making a total for the year of 10.5c after an interim of 4.5c a share was paid.
TGA 2013 Results Presentation
