Vita Group unfazed by Telstra's woes

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Vita Group unfazed by Telstra's woes

Telstra's only master license partner Vita Group appeared unfazed by the telco's recent financial trouble, returning to growth in the last six months.

Vita Group, which owns and operates a network of more than 100 Telstra retail stores, saw its revenue, earnings and net profit grow thanks to shifting its strategy on how it serves small business customers.

The company reported revenues of $377 million for the half-year ending 31 December 2018, up 14 percent. At the same time, EBITDA was up 25 percent to $25 million thanks to an "optimisation of the physical store network" while net profit was up 26 percent to $14.1 million.

Last year, Vita announced that it would transition away from the Telstra Business Centre model in favour of the new Telstra Business Technology Centre model, which caters to small-to-medium business customers up to 100 seats. The new centres offer customers whole-of-business solutions such as connectivity, cloud applications and infrastructure, security, professional and managed services.

As a result, Vita transitioned its small business customers with 10 seats or less to the new retail channel. The company said it now operates the larger format Telstra Business Technology Centres in four significantly expanded geographic territories.

The renewed focus on small business customers seems to have paid off, with sales from devices, connectivity and accessories strongly contributing to Vita's ICT channel.

It's difficult to gauge exactly how well the ICT segment has performed for Vita given the company did not report individual segment results. Vita has also begun diversifying its portfolio with investments in markets such as non-invasive medical aesthetics and athletic wear.

"We are really pleased to deliver such a strong performance, despite tough conditions in the ICT industry," chief executive Maxine Horne said. "Our long-term strategic partnership with Telstra remains strong and we will continue to invest in our retail and business channels and enjoy continued profitability and cash flow from this part of our business."

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