Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Renaissance still unprofitable on quakes, Apple competition

Renaissance still unprofitable on quakes, Apple competition

By Paul McBeth

Sept. 7 (BusinessDesk) – Renaissance Corp., the primary local distributer of Apple Inc. products, is warning shareholders not to expect a profit until the 2012 financial year as the Christchurch earthquake and new competition in Apple Inc. distribution saps earnings.

The Christchurch-based company expects to make a pre-tax loss of up to $4 million in the 12 months ending Sept. 30, booking a $2.7 million charge on the Christchurch quakes and cutting gross margins by $1.5 million after the new Apple competitor, Ingram Micro New Zealand Holdings, entered the market last year.

Renaissance doesn’t expect to return to profit until the 2012 financial year with forecast net earnings of $1.5 million. It made a pretax loss of $2.6 million last year, when it changed its balance date to September.

The extra competition and natural disasters have forced Renaissance to cut costs, including the laying off of 99 workers since November last year, and has kept it in breach of its banking covenants.

“The trading result for 2011 will not be pretty,” chairman Colin Giffney said in a letter to shareholders. “Significant reductions we have made in employee numbers and operating expenditures will begin to flow in 2012” and will help the company return to profit, he said.

This year’s bottom-line loss might not be as bad as feared if Renaissance’s $2 million of insurance claims are successful, though the level of recovery is uncertain.

In the past 12 months, Renaissance has had to contend with the Canterbury quakes, while iPod and Mac manufacturer Apple Inc. started using a second distributer in New Zealand.

Renaissance is more upbeat about revenue, which is forecast to fall 11% to $185.3 million in the 2011 financial year, while bouncing back to $196.8 million next year.

The shares were unchanged at $1.32 in trading today, and have slumped 52% this year.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 


Auckland Airport: North American Touch Downs Make AA Most Connected In Australasia
The return of American Airlines, the world’s largest airline, announced today has cemented Auckland Airport’s title as the Australasian airport with the most non-stop connections to the United States and Canada... More>>



Reserve Bank: Monetary Conditions Tighten By More And Sooner

The Monetary Policy Committee today increased the Official Cash Rate (OCR) to 2.0 percent. The Committee agreed it remains appropriate to continue to tighten monetary conditions at pace to maintain price stability... More>>


The Download Weekly: Vodafone FibreX back in court

Vodafone and the Commerce Commission head back to court over FibreX in a week the TCF issues broadband marketing codes that should avoid similar problems in the future... More>>



Kiwibank: Savers To Benefit From Higher Returns Following OCR Rise

Following market movements Kiwibank is pleased to increase the interest rate and rates of return on its savings accounts... More>>

Fonterra: Provides 2022/23 Opening Forecast Farmgate Milk Price & Business Performance Update
Fonterra today announced its 2022/23 opening forecast Farmgate Milk Price and provided an update on its third-quarter performance... More>>


Stats: Quiet Start For Retail In 2022
The volume of retail sales was relatively unchanged in the March 2022 quarter, following a strong increase in the December 2021 quarter, Stats NZ said today... More>>