Telstra partner Vita Group has acquired three of the telco's stores for $5.7 million in the first half of the 2017 financial year, and is in negotiations to add another five.
The acquisitions were made through Vita's Fone Zone brand, which acquired the licences and related business assets to operate the Cairns, Wollongong and Geelong Telstra licensed stores.
The company expects the new additions will help lift average store earnings, with closures of lower-performing shops also on the table in order to optimise cash flow; one such store has already closed this first half.
Vita revealed it was negotiating the purchase of another five Telstra stores for $6 million, despite the telco's change in remuneration structure announced in November 2016, which could mean smaller profit margins.
The five stores in Vita's sights are Telstra Store Baldivis, Mandurah, Narellan, Sunshine Plaza and Top Ryde. The additions will take the group's number of Telstra-licensed stores to 107.
Vita Group has just reported $344 million in revenue for the first half of the year ending 31 December, an eight percent increase on the previous corresponding period. Underlying EBITDA was up 15 percent to $35 million, while net profit after tax was up by 10 percent to $21.4 million.
The retail channel delivered strong results and revenues increased by five percent, with growth in fee income offset by slower growth in low-margin device sales. The SMB channel achieved a 35 percent increase in revenue, with growth occurring across all key product categories, according to the company.
Enterprise channel revenues grew by 16 percent, off the back of key account wins. The company's accessories brand, Sprout, increased revenue by 28 percent.
Vita Group chief executive Maxine Horne said: "Moving forward, we’re excited about the next phase of our strategy. As well as continuing to drive returns from our telecommunications business, we are actively looking for opportunities to take what we’re good at – our competencies – and apply them in other attractive categories, in addition to those that we are already in."
Vita Group has invested $8 million into IT in the previous financial year, most of which went into a Salesforce CRM in order to replace disparate systems used across the group.
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