Renaissance’s direct business posted the most notable percentage increase in profitability in the six months to 30 June, according to unaudited results posted to the Stock Exchange.
The direct business’ revenue, grew to $25.6 million from $21.9 million for the previous corresponding half year, with profit growing 30 percent to $714,000. It comes from customers in government, education (including the Natcoll subsidiary), enterprise and small business.
The traditional distribution business’ revenue grew slightly from $50.7 million to $51.7 million year on year for the half year, although profit was slightly down to $1.67 million.
Retail revenue grew nearly $2 million to $23.1 million, with a $183,000 loss for last year’s corresponding six months turned into a $21,000 profit this year.
The online business’ profit was $30,000, up from a profit of $4,000 the previous corresponding half year, with revenue of $353,000, up from $105,000.
CEO Richard Webb expects the trend toward its direct business growing faster than the traditional distribution business will continue, saying its creative services, application development and on-site support are behind the increasing profitability of the direct business.
“Anybody who has had a direct business has been introducing new services. We’ve got a platform and a mobile applications business that is starting to come into its own. We’ve had huge requests from clients for those types of applications and programmes and that’s much more lucrative than just selling a box. Our mix will continue to shift more to applications and services.”
In his interim report, chairman Colin Giffney stated that; “Because profitability in our traditional distribution business has become so constrained our drive is to increase the revenues we earn from direct enterprise clients, and direct consumer clients through our traditional retail outlets and our online ecommerce platform.”
In the report, Giffney said distribution accounts for 50 percent of group revenue, with major customers including 20 retailers, and more than 100 resellers of varying sizes.
For the six months to June overall, Renaissance recorded a year on year revenue boost of 7 percent, to $100.9 million, and a net surplus after tax of $473,000.