Thorn Group produces promising results
Thorn Group produces promising results
Source: The Bull
With consumer spending down and a lacklustre economy, Thorn Group, owners of well-know retail rental outlets Radio Rentals and Rentlo, are well positioned to take advantage of a struggling consumer market.
According to a recent article by The Bull, people with bad credit histories are flocking to Radio Rentals, helping boost the revenues of its parent company Thorn Group by eight per cent.
The Radio Rentals business posted record rentals and revenue for the 12 months to March 31.
While Thorn Group’s net profit was flat for the year at $28 million, this was largely due to new product development, which offers the prospect of earnings growth in the future.
New product developments include:
- Rent Drive Buy which allows customers to rent a car for 12 months with the option of applying for credit to buy it at the end of the contract.
- The expansion of Thorn’s financial services business, offering loans over $5,000 through its Cashfirst business.
- The introduction of hardship contracts that give hard-up customers more time to pay.
Overall the fundamentals for Radio Rentals looks promising, with an increase of 6 per cent in rentals and with customer retention across Radio Rentals increasing from 44 per cent in 2011/12 to 48 per cent in the 2012/13 year.
UGC recommended Thorn Group to clients in April 2013. With the stock up around 4% in morning trade today, most clients are sitting on average returns of ~14% in just one month.
If you would like to find out how you can invest in thriving but under the radar companies like Thorn Group, contact UGC today to speak with one of our financial strategists for a No Cost, No Obligation consultation on 03 8657 7640 or email info@ugc.net.au.
The information contained in this report is General in nature and has been prepared without taking into account your objectives, financial situation and needs.