Economy

Small cap results: The Reject Shop, Noni-B, Wotif and Mortgage Choice

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Mortgage broking chain Mortgage Choice has recorded a 5% lift in net profits to $10.6 million in the second half of 2007, up from $10.1 million in second half 2006. Revenue also increased by 9% to $85.5 million.

Mortgage Choice managing director Paul Lahiff said the business had not been directly affected by the international credit squeeze, but it was likely to change the shape of the sector in the coming months.

“In the coming six months, we can expect to see continued high levels of competition and innovation in the mortgage broking market, together with some consolidation and rationalisation of smaller to mid-sized operators who cannot compete effectively in this changing landscape,” Lahiff said.

Discount retail chain The Reject Shop boosted profit to $14.1 million in the second half of 2007, up 38.4% on the corresponding period in 2006. Revenue also increased from $149.5 million to $190.1 million over the same timeframe.

The Reject Shop managing director Gerry Masters said the business plans to add eight new stores to the chain over the next six months on top of 14 stores opened in the second half of 2007.

“Sales continue to be strong and while sharemarket volatility, interest rate rises and petrol prices may impact on the broader economy, we believe our offering resonates well with value-conscious consumers wanting or needing to save money,” Masters said.

By contrast, retail fashion group Noni-B’s half-yearly profits declined from $6.1 million in the second half of 2006 to $5.7 million in the same period in 2007, a 7.2% drop.

Although total sales increased 5.8% to $69.7 million, a loss of $800,000 on the 19 stores in its new La Voca fashion chain drove profits lower over the six months to 31 December.

“While the loss by our La Voca stores is disappointing, we have always regarded La Voca as a long-term growth strategy which would take up to three years to make a significant earnings contribution,” managing director Alan Kindl said, adding that the business plans to open further stores in 2008.

Online accommodation business Wotif lifted second half 2007 profits to just over $17 million, up from $11.1 million in the second half of 2006. Revenue lifted by 32% from $31.04 million to 41.06 million over the same period.

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