15/04/2003 - 22:00

Partners lift RentSmart

15/04/2003 - 22:00

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RentSmart’s business partners include Australia’s two largest retail groups, Coles Myer and Woolworths, two of Australia’s biggest banks in ANZ and National, and global IT suppliers Hewlett-Packard and Compaq, which merged last year to form HP.

Partners lift RentSmart

RentSmart’s business partners include Australia’s two largest retail groups, Coles Myer and Woolworths, two of Australia’s biggest banks in ANZ and National, and global IT suppliers Hewlett-Packard and Compaq, which merged last year to form HP.

More than 800 retail outlets offer RentSmart's rental finance products, including Myer Grace Bros, Megamart, Officeworks, Dick Smith Electronics and Telstra Shop, as well as independent computing suppliers such as Abacus and Portacom.

RentSmart was at the vanguard of a brand new industry when it started in 1996, providing rental finance to help small businesses acquire computers, technology and office equipment.

RentSmart’s revenue grew to $6.5 million last financial year and managing director Ned Montarello is looking forward to further rapid growth, with revenue expected to lift 30 per cent this year. The company has also become strongly profitable, after recording its first profit in 2001-02.

"We will have a great profit this year. It will be seven figures on an EBITDA basis. It will be a very good year," Mr Montarello said.

Looking ahead, Mr Montarello sees plenty of growth potential. With 1.2 million small businesses in Australia spending $5,000 to $6,000 per annum on office equipment, the potential market is worth at least $6 billion.

"There is an enormous untapped market here in Australia," Mr Montarello said. "We also have serious intentions for international growth." He believes RentSmart is well placed to chase extra growth.

"We are essentially a processing system with a very strong brand. We own our software, its portable and its scaleable," Mr Montarello said.

Mr Montarello is particularly excited by a strategic alliance with the ANZ Bank, which was executed last October. Since then the two companies have been developing a number of opportunities, including the outsourcing of call centre and finance processing functions to RentSmart.

"A major core competency is being outsourced," Mr Montarello said. "Their confidence is sufficient to have a Perth-based organisation run that for them."

Mr Montarello has an unusual take on the competitive landscape facing RentSmart.

"Our biggest competitor is cash and credit cards. I’d like to see some keener players enter the market, to help raise awareness of the product and to help grow the market," he said.

This would include educating small businesses about the cash flow and tax benefits of renting office equipment rather than buying with cash.

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