Tech distribution and education company Renaissance has announced that its MagnumMac retail business has returned to profitability six months ahead of plan.The positive news comes on the back of a 17% growth in revenue for the first three months of this y
Tech distribution and education company Renaissance has announced that its MagnumMac retail business has returned to profitability six months ahead of plan.
The positive news comes on the back of a 17% growth in revenue for the first three months of this year.
Renaissance Group had originally expected MagnumMac wouldn’t return to profitable trading until the end of 2010.
The Renaissance retail business, comprised of seven MagnumMac stores across New Zealand, weathered a “challenging environment” in 2009, according to the company.
“We’re delighted with the turnaround in the retail business in the last six months,” said Renaissance chief executive Richard Webb.
“We embarked on a number of initiatives in early 2010 and we are now reaping the rewards of those initiatives.”
“Those initiatives included reduced overheads by using centralised marketing and HR functions within the Renaissance Group, a large investment in upskilling the retail sales force, improved communications between the stores, a focus on expanding the product offering and changing the sales representatives reward model.”
Short term pain, long term gain
After Renaissance lost its Apple exclusivity in 2006, then chief executive Paul Johnston led an aggressive push to diversify, taking on new IT product lines, and moving beyond distribution - including the 2007 purchase of education company Natcoll for $6 million in 2007.
The same year, Renaissance bought Apple retail chain Magnum Mac for $3.5 million. At the time, Magnum had an annual turnover of $28 million and profit of $1 million.
The Natcoll purchase coincided with the rise of the New Zealand dollar, which put a damper on lucrative foreign student enrollments, while the Magnum Mac purchase soon ran into the teeth of the recession.
Poor results followed, and Mr Johnston resigned over Christmas (though rapidly re-emerged to help a new distribution company that, among other things, is setting up Dell's first retail network in New Zealand).
Renaissance will release a full six-month report to the market in August.
The company's shares (NZX: RNS), which have a 52-week range of 19 cents to 31 cents, closed flat today at 23 cents against a broader market rise of 0.75%.
