A weak retail market has hit the Thorn Group, owner of consumer leasing business Radio Rentals.
The company just posted a loss of $9.67 million for the half year to September, compared to a profit of $15.2 million last year, with revenue sliding 12.5% to $132.41 million over the six months.
The loss includes a $20.7 million write-off of goodwill related to Radio Rentals and Trade & Debtor Finance.
“The consumer leasing division, operating under the Radio Rentals brand, is facing a number of challenges,” the company says.
These include a “weak retail market”. Australian retailers are facing difficult domestic trading while awaiting the entry of Amazon as a major player.
Thorn’s acting CEO, Peter Forsberg, says the results reflect a transition process under way at the company.
“While the consumer leasing business still faces headwinds including declining volumes for many reasons, the business has made considerable progress on many fronts including addressing its cost position, making its pricing more competitive and improving the customer value proposition, and making it a much better operation in terms of risk management and customer outcomes,” says Forsberg.
“The combination of this progress with a growing business finance division positions Thorn on a path towards achieving stability.”
Thorn reaffirmed its guidance for full year cash profit after tax to be in the range of $17 million to $20 million.
The company declared a fully franked dividend of 1 cent, down from 5.5 cents for the same six months last year.
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