Vita Group has posted a net loss of $15.2 million for the first half due to impairment charges of $19 million and a three percent revenue decline.
It's a major fall from last year, when the listed company, which is the parent of Apple Premium Reseller chain Next Byte and the biggest operator of Telstra Stores, posted a $2.7 million profit.
The bad news was partially offset by a 12.1 percent increase in EBITDA, fuelled by the strong performance of Telstra Stores; investors will also be happy with a 66 percent boost in interim dividends.
Vita Group said it achieved growth in areas it identified as strategically important, while non-strategic segments declined.
"The telecommunications segment recorded a one percent increase in revenues on the prior corresponding period, reflecting strong growth from the business segment and from Telstra-branded stores," said the company.
Vita's extensive network stands at 167 points of presence, of which 98 are Telstra Stores and Telstra Business centres. The company said it expects to add another 12- 14 Telstra Stores to its network during 2014 as it strengthens its alignment with the telco under a deal struck late last year.
According to its statement to the ASX, "The performance of the Telstra portfolio reflected higher like-for-like revenue, a focus on selling a broader product range, specifically broadband, digital business and media products in addition to mobility, and the benefit of higher productivity from a maturing store footprint."
However, Next Byte remains a black spot in the results.
Vita Group is remodelling its Next Byte stores to have the look and feel of Apple's own retail temples, and while new strategy seems to be paying off, overall computing revenues were down 15 percent.
"While the contribution from older-format stores was lower, reflecting weaker like-for-like comparatives and closed stores, the group's new format Apple Premium Reseller (APR) stores delivered an 18% percent uplift in revenues."
Vita said that while it expected the performance of Next Byte to improve, "the roll out of new-format stores was unlikely to be at the scale previously anticipated and, therefore, had revised down financial expectations for the brand".
"The group's resources and focus would be directed toward opportunities in the telecommunications and IT segments, which offered better returns in the medium term, particularly in business channels."