ThinkSmart Continues Growth – Posts 5% Rise In First Half Profit

11 Aug ThinkSmart Continues Growth – Posts 5% Rise In First Half Profit

• Strong product demand with 23% growth in new customers.
• Grown first half NPAT 5% with earnings strongly weighted to second half. 
• Strong growth in Australian business.
• UK Consumer product on track to launch in time for key Christmas trading period.

ThinkSmart Limited (ASX:TSM), a leading international computer and office equipment financing company, has posted a $2.7m half year net profit after tax, up 5% on the previous corresponding period.

Profit growth was dampened by the strength of the Australian dollar.  If exchange rates for this half were the same as the corresponding period in 2009, NPAT would have increased by 22%.

ThinkSmart Executive Chairman and CEO, Ned Montarello, said the business had experienced strong demand in Australia for its products in the first half, where it grew new customer contracts by 38% and EBITDA 31%.

“Our Australian business continues to deliver very solid growth, coming off the back of a really strong 2009,” said Mr Montarello.  “We see this continuing through 2010.”

“The strength of the Australian business has offset a soft UK result, where we’ve been impacted by the re-engineering of our partners’ new B2B strategy, which is scheduled for completion in September.  Notwithstanding this we are buoyed by their recovery in the UK and the opportunity that we now have to gain market with them and accordingly we have resourced that business for growth.

“While this has impacted our planned growth we are targeting between 8-12% growth for the year and  are positioned well for strong like for like growth in this second half.”

Mr Montarello said the business was on track to enter the consumer market in the UK in time for the main Christmas trading period.

“This will see us not only expand the breadth of our proposition in the UK, but also significantly increase our store footprint as we move into Dixons’ 500 store Currys chain for the first time,” said Mr Montarello.

“We have just executed a new exclusive contract to 2015 with Dixons and are both committed to the success of our new consumer product initiative. We believe it will replicate the success that we have achieved here in Australia but in a market three times as big.”

Dixons Retail is the largest electrical retailer in the UK dominating the high street with over 700 stores branded as PC World and Currys.  In 2009, DSG had UK electrical sales of over A$7bn (£4bn).

ThinkSmart has been running a successful consumer proposition in Australia since 2004, and has delivered a 51% CAGR in local consumer volumes over the last 4 years.  Consumer rental now accounts for more than 70% of the Australian new business.

ThinkSmart’s Board determined not to pay an interim dividend in order to retain funds to support strong growth opportunities in the UK.