23/05/2013 - 15:18

ThinkSmart returns to profit

23/05/2013 - 15:18

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ThinkSmart returns to profit
ThinkSmart's Executive Chairman & CEO Ned Montarello

Perth company ThinkSmart has predicted an after-tax profit of $0.5 million for the first six months of 2013, at its annual general meeting today.

This is a $2 million improvement from the same period last year for the international provider of point-of-sale financing solutions, 

The return to profitability comes off a disappointing result for ThinkSmart in the year to December 2012, when it recorded a loss of $1.4 million.

ThinkSmart executive chairman and CEO, Ned Montarello said the company expects a return to a full year of profit in 2013 and that ThinkSmart “has a greater diversification in product and funding than at any point in its history and we are well positioned to deliver growth in 2013 and beyond”.

The company, which operates in both Australia and UK, pointed to its UK operations as the main source of the company’s growth, reporting a 58 per cent increase in new business sales and a 26 per cent increase in profit contribution in 2012 through its partnership with UK retailer Dixons.

Mr Montarello said that ThinkSmart’s UK business, “is continuing its strong growth trajectory into 2013 with both volumes and profit building well; the short and long-term prospects in the UK business remain very positive”.

Australia fared poorly in comparison however with the company reporting a 29 per cent decline in volumes for its rental product, RentSmart in 2012.

Mr Montarello said however that the company anticipates that volumes for RentSmart, “will improve through the year on the back of comprehensive marketing plans which have recently been agreed with our retail partners”.

He also described two strategic changes for ThinkSmart’s Australian operations.

Firstly the company transitioned to a securitisation funding model that provides it access to significant funding from multiple funders.

Secondly the ThinkSmart launched its new payment plan product Fido that the Mr Montrarello expects “to transform the prospects of the Australian business”.

Fido is a “no interest ever” payment plan that enables consumers to take home products immediately, at a 10 per cent deposit.

Mr Montarello said that the Fido is already contributing positively to ThinkSmart’s financial results and that they expected the payment plan, “to generate higher new sales volumes in 2013 than RentSmart”.

ThinkSmart announced earlier this year that it had partnered with JB Hi-Fi and TeleChoice as Fido retailers.

Mr Montraello also announced at the annual general meeting that Keith Jones, a former senior executive of Dixons, would be invited to join ThinkSmart’s board as a non-executive director, pending a board meeting tomorrow. 

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