The Thorn Group, owner of leasing business Radio Rentals, has cut its profit forecasts by up to 30% as a weak retail market takes hold.
In a market update, the company says it expects half-year profit after tax to be around $11 million and the full year to be in the range of $17 to $20 million.
The forecasts represent a 30% reduction on the previous year’s results. Installation volumes for Radio Rentals for the half-year are 27% down.
“This guidance primarily reflects a decline in trading conditions in the Group’s Radio Rentals division and a poor month of trading in September which has continued into this month,” Thorn says.
Retail trade grow has stalled in Australia, according to official numbers.
The Australian Bureau of Statistics says sales came in flat during July in seasonally adjusted terms, missing forecasts for an increase of 0.2%.
It was the weakest result since March when Cyclone Debbie caused widespread damage and disruption to southeast Queensland and northern New South Wales.
Excluding food, the largest category by total dollar spend, sales slid by a larger 0.5%. June’s result, initially reported as an increase of 0.3%, was also revised down to 0.2%.
The Thorn Group says other variables impacting on its business include an ASIC (Australian Securities and Investment Commission) investigation into Radio Rentals’ lending practices, a class action launched by Maurice Blackburn.
The company is due to announce its annual results next month.
Thorn shares last traded at $1.16, down from a 12-month high of $1.96.