VTG 2.65% 97.0¢ vita group limited

expect another profit downgrade

  1. 2,812 Posts.
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    Phone Sales are continuing to slide massively.
    Phone Margins are reducing, especially with more low cost NextG handsets available.

    In the area of plan recontracting there are huge issues for dealers. Customers are currently more cautious in resigning.
    After 24 Months Dealers lose their Trailing Commissions.

    The Call Centres in trying to reach their targets are fighting extremely hard for a decreasing pie.

    The dealers are losing out massively to call centre activity.

    Telstra continue to push Phone Plans, and at the moment Phone Plan to MRO Ratio is increasing.

    The difference to a dealer is that a Phone Plan he might make $35 Profit on a Phone, versus $180 Profit on an MRO

    So sell 10% more Phone Plans and your profit will drop dramatically. Sell 20% more phone plans and you might as well shut the doors.

    Add the economic disaster that the iphone has been to dealers.
    The current reduced cash flow and increased processing times caused by Telstras new computer system and the worsening retail sales.

    Since July things have gone from bad to terrible.
    Only a big boost in Christmas Sales in December will save this company from some really ugly numbers for Q2.
    Fone Zone has some real problems.

    Who is to blame?
    Don't know if you can blame management for this one.

    Blame David Moffat from Telstra.

    You need to go to David Moffat and tell him what you need to survive as a dealer.
    Or start talking to Vodafone or Optus.

    If you don't you will face massive write downs as you will need to close 2/3rds of your Fone Zone stores to survive.

    Get on the phone to David Moffat and don't hang up until you get a better deal.
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