23/02/2009 - 10:30

ThinkSmart surges on annual profit lift

23/02/2009 - 10:30

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Shares in West Perth-based ThinkSmart have surged as much as 71 per cent on the back of a stellar 2008 net profit result, which soared 333 per cent.

ThinkSmart surges on annual profit lift

Shares in West Perth-based ThinkSmart have surged as much as 71 per cent on the back of a stellar 2008 net profit result, which soared 333 per cent.

The office equipment financing company booked an annual net profit after tax of $3.2 million, up from the previous year's $738,066.

Earnings before interest, tax, depreciation and amortisation was $11.3 million, up from $8.3 million, exceeding the company's recent profit guidance.

Total revenue rose 7 per cent to $38.98 million.

"This is a pleasing and solid result given the current global economic climate," ThinkSmart chief executive Ned Montarello said.

"We have had strong customer demand which is evidenced in markets like the UK where, despite our partner's retail sales being in double digit decline, we have experienced a 10% like-for-like increase in demand as small businesses increasingly look to solutions such as ours to help them sustain their cash flow."

The directors have declared a fully franked final dividend of 1.5 cent per share.

Shares in ThinkSmart jumped 12.5 cents to an intraday high of 30c before settling at 25c at 12:38 AEDT.

 

 

The announcement is below:

 

 

ThinkSmart Limited (ASX:TSM), an international computer and office equipment financing company, reported a record full-year EBITDA (pre IPO and U.S. costs) of $11.3 million for the year ended 31 December 2008, up from $8.3m in the previous corresponding period. The results exceeded the company's recent profit guidance.

Total revenue rose 7% to $38.9 million with gross margin increasing 7%. ThinkSmart declared a fully-franked final dividend of 1.5 cents per share, representing a 22% dividend yieldi for the full year which will be payable to shareholders on the register on 14th April 2009.

"This is a pleasing and solid result given the current global economic climate," said ThinkSmart Founder and CEO, Ned Montarello. "Our business has proven exceedingly resilient, and traded well through these challenging times.

"We have had strong customer demand which is evidenced in markets like the UK where, despite our partner's retail sales being in double digit decline, we have experienced a 10% like-for-like (LFL) increase in demand as small businesses increasingly look to solutions such as ours to help them sustain their cash flow. Locally in Australia, JB Hi-Fi and Dick Smith continue to perform well."

"Margins are up, and our recurring inertia income, which is received on the expiry of customer contracts continues to exceed forecasts."

Mr Montarello said that despite most of the downturn for retail trade in Europe having occurred in the last half of the calendar year, ThinkSmart had achieved a 33% growth in EBITDA for that period over the same time in the previous year.

"We finished off 2008 with strong EBITDA growth and have seen a solid LFL growth for January. Although we expect 2009 to be flat with regard to customer acquisition, we have a positive outlook for EBITDA in 2009.

"Operationally, we are net debt free; have managed our cost base; and are aggressively pursuing market share gains within our European territories where we have a real opportunity to increase our retail distribution channels.

"Our strategy is to align with market leading, international retailers to meet the finance needs of small businesses shopping for technology in their stores. It's a niche that we believe we are leading globally. While we have not scheduled to expand in to any new territories during 2009, our clear strategy is to continue to grow market share in all of our existing territories, both organically and through the establishment of new retail partnerships."

From 22 May 2009, ThinkSmart's Chairman, Peter Mansell, has decided to retire from his role as Chairman of the board, a position which he has held since April 2007. Mr Montarello will take on the role of Executive Chairman and CEO for the Group. Mr Mansell will remain on the board in a non-executive director role.

"Becoming Executive Chairman and CEO is a role that I am pleased to take on and I think that this is the appropriate time to do so," said Mr Montarello. "I am delighted that Peter's experience and skill sets remain on the board and I thank him for his chairmanship through our transition to being a publicly listed company. We have a dynamic Board that is clearly focused on delivering the best outcomes for all shareholders."

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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