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Summary
- ASX listed company, Vita Group share price zoomed up by 16.162% on 21 August 2020. The soared share price was buoyed by the unveiling of its bolstered FY20 results ended 30 June 2020 on the same day.
- The Group embraced Federal government’s assistance in the form of the JobKeeper wage subsidy, which furnished a net AU$10.2 million benefits, after top-up payments to team members and aided in safeguarding employment as well.
- The Group’s boosted results for the year ended 30 June 2020 were underpinned by augmented performance in the core channels ICT (mainly up to March 2020) and skin-health and wellness (growth and advanced productivity) and a proactive response to the coronavirus pandemic.
- Although COVID-19 headwinds would continue to impact the nation, Vita would thrive while focusing primarily on its core ICT and SHAW businesses, consulting customer base to generate value and furnish exceptions outcomes for them.
- Furthermore, with the sustained solid and flexible balance sheet, the Group would further invest in the upcoming strategic opportunities.
In response to COVID-19 crisis, on 30 March, the Morrison government announced a ‘JobKeeper’ stimulus package worth AU$130 billion fundamentally furnishing a wage subsidy plan whereby employers would receive AU$1,500 per fortnight for each employed employee for six-months ending September 2020, subject to qualification.
On 21 July, the government notified that JobKeeper Payment had been extended until 28 March next year. The scheme would be aiming to aid companies and not-for-profits, which still are being considerably affected by COVID-19.
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Despite the fact that numerous entities are going belly up during COVID-19 unprecedented crisis, one of the ASX listed Australian retailer, Vita Group Limited (ASX:VTG) has experienced swelled earnings while gaining benefit of ~AU$12 million from the Federal Government’s JobKeeper wage subsidy programme.
Vita is a leading Australian retailer, enriching customers' way of life via expert consulting, creating value throughout an expansive brands network.
The shares of ASX listed Vita last traded at AU$1.150, indicating a surge of 16.162% from the previous close.
Noteworthy, the increase in Vita’s share price on 21 August 2020 was followed by the released results for the full year ended 30 June 2020, as discussed in the article.
Join us as we walk you through the latest news of the ASX listed company, Vita.
Impressive business performance during FY20
Vita unveiled its boosted FY20 performance report despite COVID-19 headwinds and changes to Telstra’s remuneration in its information and communication technology (ICT) model from 1 July 2019 for the year ended 30 June 2020.
Vita highlighted soared total revenue of AU$773.1 million for the year ended 2020, noting an upsurge of 3% on the prior year.
The swelled revenue reflected an enlarged growth in each of its channels:
- Increment of 47% to AU$20.1 million in Skin-Health and Wellness (SHAW) driven by robust organic growth due to benefits of the Group’s consulting proficiency and productivity advancement;
- Increase of 5% (y-o-y) to AU$752 million in Retail ICT, primarily due to strong revenue surge in hardware; and
- Upsurge of 14% in Sprout.
Vita’s EBITDA, excluding the impact of AASB 16 (implemented during the period) for comparative purposes, noted an increment of 9% y-o-y and was recorded at AU$49.9 million, and EBIT experienced a y-o-y growth of 7% to AU$37.2 million.
These bolstered results echoed the strengthened performance in the ICT channel (predominantly up to March 2020), growth and enhanced productivity in the skin-health and wellness (SHAW) channel, and a swift response to the COVID-19 pandemic.
The Group also highlighted that there were numerous non-recurring items in its financial results. These non-recurring items comprised of the net benefit of JobKeeper subsidy of the Federal government; amendments to the carrying values of few intangible and tangible assets, liabilities and provisions; and after top-up payments to team members.
It is worth noting that assistance from the Federal government in the form of the JobKeeper wage subsidy not only provided a net AU$10.2 million benefit, after top-up payments to team members, but it was also contributed in safeguarding jobs as well.
Source: Company’s presentation, dated 21 August 2020
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Furthermore, Vita’s underlying EBIT (excluding the impact of non-recurring items) witnessed an increase of 4% (y-o-y) to AU$36.1 million.
Vita’s net profit after tax (NPAT) witnessed a plunge of 8% and stood at AU$22.4 million, as a consequence of AASB 16 (AU$1.6 million unfavourable effect) and inflated effective tax rate ensuing inclusion of non-deductible and non-recurring charges.
Furthermore, the Group possessed a strong balance sheet with cash of AU$24.1 million primarily due to strengthened operating cash flows, well-organised capital management and a primary focus on liquidity during coronavirus.
The Group recorded operating cash flows after tax of AU$41.1 million and capital expenditure of AU$19.1 million, directed towards enlargement of clinics in the SHAW channel, refits of retail ICT store, and IT investments.
Vita’s net financing cash flows of AU$11.9 million reflected lease payments (AU$11.5 million); dividend payments (AU$6.5 million); debt repayments (AU$8.8 million), all offset by the Group’s dividend reinvestment plan (AU$2.0 million); and proceeds from borrowings (AU$12.8 million).
Moreover, full remuneration of each of the Group’s non-Executive Directors and CEO were reinstated from 22 June 2020.
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Dividend
Vita also updated that its shareholders would be receiving a fully franked final dividend of 2.4 cents per share (cps) on 25 September 2020. The dividend declared would go ex on 10 September 2020 and has a record date of 11 September 2020.
Notably, Vita refrained from paying an interim dividend.
Way ahead
Despite the fact that COVID-19 would continue to impact the world, Vita would compete with the challenges and thrive while focusing on its core ICT and SHAW businesses, generate value with value and retail business consumers via consulting and deliver incomparable outcomes for them. Additionally, Vita would uphold a solid and flexible balance sheet to uptake and invest in strategic opportunities.
