Telstra reseller Vita Group upgrades profits after unexpected iPhone windfall

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Telstra reseller Vita Group upgrades profits after unexpected iPhone windfall

Telstra stores operator Vita Group expects to surpass its initial guidance for the first half of the 2018 financial year on the back of “robust” Christmas trading and an unexpected windfall in iPhone 8 and iPhone X sales.

The company expects to deliver earnings before interest, tax, depreciation and amortisation (EBITDA) of around $20 million for the six months to 31 December 2017, up from initial guidance of $16-$18 million.

The iPhone windfall came after Apple made an "earlier-than-expected relaxation" on allocations of the newer models.

“We are pleased with the improved outcome for the first half of the financial year and are confident in our ability to deliver another solid result for FY18,” Vita Group chief executive Maxine Horne said.

“We will continue to look for efficiencies and improvements in our cost to serve across all of our businesses, whilst continuing to deliver exceptional customer experiences.”

“We look forward to updating the market further when we announce our half year results in February.”

Vita also updated guidance for the full year ending 30 June 2018, expecting to deliver earnings of between $38 million to $43 million, up from the initial guidance of between $36 million to $43 million.

The expected results for the first half of the financial year is subject to final accounting adjustments and auditor review. Vita Group will report the results on 28 February.

In August last year, Vita reported record sales despite Telstra's decision to cut partner remuneration by 10 percent since July 2017, in addition to cuts already made in December 2016 and February 2017.

Revenue for the entire Vita Group, including its enterprise solutions business, was up five percent for the 2017 financial year ending 30 June to reach $674.6 million.

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