Vita Group delivers a record result for FY17

Vita Group delivers a record result for FY17

Vita Group (ASX:VTG) today reported a record result for the twelve months to 30 June 2017. The group delivered a 5 per cent increase in revenues from continuing operations to $674.6m. Earnings before interest, tax, depreciation and amortisation (EBITDA) from continuing operations was $65.0m, up 5 per cent on underlying EBITDA in the prior year. Net profit after tax (NPAT) from continuing operations was $39.0m, up 11 per cent on underlying NPAT in the prior yearThere were no underlying adjustments to FY17 earnings from continuing operations. Prior year underlying earnings from continuing operations excluded a $4.0m non-cash benefit (pre-tax) relating to contribution from the group’s now discontinued ESP swap and warranty products.    

The Board declared a fully franked final dividend of 7.4 cents per share (cps), resulting in a fully franked dividend for the full-year of 16.6 cps, an increase of 19 per cent on the prior year, with a payout ratio of 65 per cent. The final dividend is to be paid on 29 September 2017 to shareholders on record as at 15 September 2017.  

Strong earnings coupled with tight management of working capital contributed to operating cash flows after tax of $52.5m, up 7 per centVita invested $20.7m in acquisitions, refits and technology solutions, whilst financing outflows were $26.6m, primarily reflecting dividends paid in the year. Vita also received $5.0m from the proceeds of a maturing term deposit. As a result, cash balances improved by $10.3m to $29.7m at the end of the periodproviding Vita with significant balance sheet flexibility to invest in growth opportunities in line with its strategy.   

Chief Executive Officer, Maxine Horne commented: “I am very pleased with our performance, which highlights Vita’s ability to execute, in spite of the current market challenges. Our results demonstrate why we focus on attracting and developing the best talent to deliver exceptional customer experiences through consultative selling. This is key to our ongoing success.” 


($m unless otherwise stated)  FY17  FY16  Change 
Continuing operations       
Revenue  674.6  645.1  5% 
Gross profit   242.9  230.7  5% 
Gross Profit Margin  36.0%  35.8%   
EBITDA  65.0  66.1  (2%) 
Non-cash benefit from ESP  0.0  4.0   
Underlying EBITDA2  65.0  62.0  5% 
EBIT  55.4  54.8  1% 
Underlying EBIT2  55.4  50.8  9% 
NPAT   39.0  38.0  3% 
Underlying NPAT2   39.0   35.2  11% 
Earnings per share (EPS)
  Underlying EPS2 
Full Year Dividend  16.60 cps  13.97 cps  19% 
Profit/(loss) from discontinued Next Byte operations  0.4  (2.7)   
EPS including discontinued operations  25.91cps  23.37cps  11% 


1 From continuing operations 

2 A non-IFRS measure. From continuing operations excluding the benefit from the discontinued ESP swap/warranty product  in FY16 


Year in Review 

Vita’s retail information and communication technology (ICT) channel delivered a 2 per cent lift in revenue and a 1 per cent increase in EBITDA, despite like-for-like revenue declining 5 per cent as a result of remuneration reductions, mainly impacting in the second half. The impact of remuneration reduction was offset by an increased focus on consultative solutionselling, enabling multi-product sales and a reduction in performance variation across the network. In addition, the physical optimisation of the portfolio delivered significant benefit during the period with Vita ending the year with 105 Telstra-branded retail stores. The group’s One Zero brand was retired at the end of the financial year, in line with Vita’s strategy within the telecommunications sector, to focus on the Telstra brand. 

Revenues from Vita’s small-to-medium business (SMB) and enterprise channels rose 20 per cent, and whilst the EBITDA result was modest in the context of group earnings, growth in relative terms was significant. This again reflected the group’s growing capability in consultative-selling and providing value for customers. This was supported by the group’s investment in the salesforce platform, which enables the management of end-to-end customer journeys, from managing the sales pipeline, through to the consulting process, and into postsales service. The group also rolled out its proprietary XLR8™ journal technology into its business channels, following its success in the retail channel. This technology facilitates improved performance management, coaching and talent development, via a single digital solution.  

Vita decided at the end of FY17 to consolidate the SMB and enterprise channels into one business ICT division, reflecting the growing importance of ICT across all customer segments. With the business channels now representing 13 per cent and 15 per cent of the group’s revenue and gross profit respectively, the focus in the coming year and beyond will be to continue to grow revenues, deliver improved profitability and partner with Telstra to drive consolidation in what remains a fragmented market 

Vita’s accessories brand Sprout reported another exceptional result for FY17 with revenues up 30 per cent. The brand continued to make significant headway in the business-to-business (B2B) sector, reporting a 75 per cent increase in B2B revenue.  

Vita’s portfolio, as at 30 June 2017, included 105 Telstra Licensed Stores, 21 Telstra Business Centres and one Fone Zone store. The group added eight Telstra retail stores to the portfolio in FY17, closed one Fone Zone store and two Telstra retail stores, the latter of which occurred under a commercial arrangement between Telstra and Vita. As communicated on Friday, 11 August, Vita has also extended its agreement with strategic partner, Telstra, which will see the number of stores Vita is able to own and operate expand to 110 in FY18 and 115 in FY20. 

In the second half of FY17, the Board conducted a review of capital management options, with the benefit of independent advice, with a view to optimise returns for all shareholders over time. The review took into account the capital requirements of existing and new businesses, capital structure and taxation considerations, and capital distribution alternatives. Whilst capital management considerations are ongoing, the Board concluded that it would maintain a 65 per cent payout ratio of profits after tax; that a stable dividend policy was preferred over short-term initiatives such as a share buy-backand that financial flexibility would be maintained to support growth initiatives.  


FY18 Outlook 

Vita and Telstra’s recently agreed changes to the terms of Vita’s Master Licence Agreement relating to tenure, remuneration and an immediate expansion of its allowable store footprint, are all aimed at delivering long-term benefits for both parties. 

The tenure of the agreement will now extend to 30 June 2023, with rolling annual extensions after this date. This is subject to annual review, which will include Vita’s performance against key metrics. A minimum of three-year’s notice is to be provided by either party, should they wish to cease the agreement at the relevant expiry date. This effectively means that, assuming extensions are granted annually, forward tenure will always be at least five years.   

On remuneration, Telstra confirmed that it was comfortable with the model of remuneration applicable for FY18, reflecting changes made up to and including 1 July 2017. It also clarified that it had made no specific decisions about any remuneration changes beyond FY18. Whilst Telstra retains the right to amend remuneration up or down to reflect changing market conditions and product lifecycle changes, the current remuneration model balances prevailing industry conditions with the economic health of the licensee channel. 

On retail store footprint, the parties agreed an immediate expansion in the allowable number of stores Vita can own and operate to 110which takes effect from now. Effective from 1 July 2019, Vita agreed to forego some legacy remuneration components, amounting to approximately  8 per cent of retail remuneration, which will be partly offset by a further expansion to 115 stores from this date. As currently applies, all movements in and out of the footprint will be subject to Telstra approval. These measures reflect the confidence Telstra continues to place in Vita to deliver results and means that Vita is well positioned to deliver long-term value to all of its stakeholders, including customers, its team members, and of course, Telstra and its shareholders. 

Whilst remuneration impacts in FY17 and FY18 will impact FY18 earnings, they are necessary in aligning remuneration with the value Telstra derives from its core product categories. Importantly, Vita and Telstra have agreed a framework that both parties are comfortable with.   

There will be several initiatives that will soften the impact of the remuneration changes. Firstly, an expansion in the number of stores Vita can own and operate to 110 will deliver benefits, along with Vita’s continued optimisation programin line with Telstra’s strategy to create a geo-clustered network of stores.  

A point of differentiation is Vita’s ability to consult with customers and provide insights to deliver greater value for the customer and this will be central to Vita’s strategy in FY18 to drive up-sell and cross-sell, in both the retail and business channels. In addition, there will be an ongoing focus on reducing performance variability, which will benefit productivity.    

In business, Vita will continue to work with Telstra on the go-to-market approach for business customers, driving further consolidation in what remains a fragmented market and leveraging scale now in place to drive growth. This will include collaboration between Vita’s business and retail channels, such as embracing small office/home office (SOHO) customers in retail.

Vita has also implemented a number of initiatives to reduce its cost base. The consolidation of the SMB and enterprise channels implemented at the end of FY17 will deliver greater efficiency in FY18. Cost reductions were also made in Vita’s support functions. The group will continue to look for opportunities to simplify and automate processes, and manage the business as efficiently as is practical.   

Vita will also continue to explore new opportunities for growth in new categories, leveraging its core capability of solution selling. Work is underway to evaluate entry opportunities and the group expects to report progress on this initiative in FY18.  

CEO, Maxine Horne commented, “As I always say, we are a people business. Our success lies in our team members and their ability to consult with our customers, gain insights, and translate those insights into providing the correct holistic solution and an exceptional customer experience. Moving into FY18, we look forward to continuing to refine these core competencies in our existing channels, whilst also exploring new business categories that we can put our unique stamp on to bring even greater value to our customers, people, partners and of course our shareholders.” 


Artisan Aesthetic Clinics adds Euphoria Cosmedic Clinic

Vita Group (ASX: VTG) has acquired Euphoria Cosmedic Clinic on the Gold Coast under its Artisan Aesthetic Clinics brand. Founder of Euphoria and highly skilled registered nurseRachel Gregory will join the team at Hope Island Road on Tuesday 4 Maybringing her significant cosmetic injectables expertise to the clinic. 

With more than 24 years of medical experience including 15 years in aesthetic treatments, Rachel has established herself as one of the Gold Coast’s most respected cosmetic injectors, known for delivering natural looking results in a professional, friendly and caring wayThe clinic has a particular focus on delivering premium cosmetic injectable treatments including anti-wrinkle, dermal filler and PDO threads.

Maxine HorneVita Group’s Chief Executive Officer, said: “We are very pleased to welcome Rachel to the Artisan teamShe will add significant value to our Hope Island Road clinic, expanding the clinic’s capability in the field of cosmetic injectables and further reinforcing the premium, personalised experience we provide to our clients.”

Artisan Aesthetic Clinics launched in 2018 with the opening of Artisan Racecourse Road in Brisbane, Queensland. Through its focus on appointing a team of highly-skilled clinicians to deliver holistic treatments and technologies in a premium environment, the brand has quickly established itself as one of Australia’s leading cosmetic clinic networks.

Artisan currently operates 20 clinics across Australia, three of which are on the Gold Coasta high-demand location for non-invasive cosmetic treatments in Australia.

Artisan Aesthetics Group – clinic network


  • Artisan Racecourse Road, Hamilton 
  • Artisan Gasworks, Newstead
  • Artisan Rosalie Village, Rosalie
  • Artisan Fortitude Valley
  • Artisan Bulimba
  • Artisan Maroochydore
  • Artisan Hope Island Rd
  • Artisan Kenmore
  • Emetheni, Burleigh Heads 
  • The Bradford Clinic, Toowoomba
  • Face Today Mediclinic, Cairns
  • HC Medical, Robina

New South Wales

  • Artisan Balmain
  • Artisan Mosman  
  • Lily Room, Chatswood 
  • Coco Skin Laser Health, Newcastle

Australian Capital Territory

  • Artisan Bruce  
  • Artisan Woden 
  • Artisan Gungahlin


  • Pamper Medical Skin Clinic, Geelong 
Read More

Sprout accessories achieves ISO certification

Vita Group’s Sprout accessories brand has been awarded two Best Practice ISO certifications, strengthening its reputation as a best-in-class manufacturer and leading provider of technology accessories in Australia.

The certifications – Best Practice Quality Management System (ISO9001) certification and Best Practice Environment Management System (ISO14001) certification – are based off international standards set by the International Organisation for Standardization. They demonstrate that an organisation’s product or service meet the expectations of its customers and reflect Sprout’s commitment to sustainability and creating technology that enhances the world not just today, but into the future.

To achieve ISO9001 and ISO14001, the business met a comprehensive set of requirements which it must now continue to meet to maintain certification. ISO certification delivers significant business benefits including improved customer satisfaction, cost reduction, improved legal compliance and risk management, and importantly, environmental benefits for Sprout and for its suppliers.

For Sprout General Manager, Ben Caddy, achieving ISO certification was an important step in the brand delivering its ten-year sustainability action plan which aims to address key elements across the end-to-end product value chain.

“At Sprout we are always aiming to improve our customer experience and quality standards, and ISO ensures we do that,” he said. “ISO9001 enables us to demonstrate our ability to provide products and services that consistently meet regulatory requirements, whilst ensuring the smooth operation of our business and exceeding our customers’ expectations. Another major focus for Sprout is to reduce our carbon impact,” Mr Caddy continued. “The standards in ISO14001 help us to define the right targets and measure and track our results to ensure that the business is constantly improving and meeting our environmental objectives.”

Sprout’s ten-year sustainability action plan involves implementing key initiatives including sourcing recyclable materials for packaging and product development, continuing to drive ethical and socially responsible supply chains, reducing carbon emissions, and designing more sustainable multi-use and eco-friendly products.

The brand is already underway in implementing these initiatives, recently launching a campaign in partnership with One Tree Planted that will see it fund the planting of ten trees for every product sold online from 21 March to 29 June. To date, Sprout has funded the planting of nearly 2,600 trees and is aiming for 10,000 trees planted by the end of June to help One Tree Planted’s reforestation efforts following the 2019/20 Australian bushfires.

Sprout is also set to move to 100% recyclable packaging towards the middle of 2021 which will include switching from foam to recycled pressed cardboard, removing non-recyclable plastic windows, and extensive use of bamboo pulp in packaging.

Compostable phone cases are also in development and due to launch later in the year. These cases will see 90% biodegradation of plastic material within 12 weeks in commercial compost systems or 12 months if composted at home.

Mr Caddy said ISO certification will ensure Sprout is held accountable for these environmental initiatives as well as its sustainability targets. It will also ensure the business is continuously improving its manufacturing and environmental management systems to the benefit of its customers and the world around it.

“ISO certification is extremely important to the business as it ensures we have the tools, processes and systems to meet our business targets,” he said. “ISO certification also places the business in a constant state of improvements so that we can not only show improvement year-on-year, but also regularly monitor our important sustainability objectives and put the processes in place to achieve them.”

Read More

Artisan Aesthetics Group reaches 20 clinic milestone with new acquisition  

Artisan Aesthetics Group (AAGcontinues to grow with the acquisition of Coco Skin Laser Health on 19 February 2021, bringing its network to 20 clinics across Queensland, New South Wales, the Australian Capital Territory and Victoria. 

Located in the beautiful harbour city of Newcastle, New South Wales, Coco Skin Laser Health has been a fixture in the local community for nearly 10 years, building a strong reputation for helping clients to look and feel more confident through beautiful, healthy skin. 

The clinic’s experienced team of 15 is comprised of dermal therapists, cosmetic nursesdoctorsand the front of house team. The Coco team will join Artisan and will continue their focus on creating personalised treatment plans containing a combination of therapies to support clients with their skin health and wellness goals. The experienced clinicians use non-surgical techniques and combination therapies to help clients to manage the signs of ageing and sun-damageAt Coco, the aim is to enhance their clients’ best features, improve their complexion, and lift and tone sagging skin. 

As part of the Artisan network, Coco Skin Laser Health will continue using industry leading clinic management software program, cosmedcloud™, and the team will gain access to clinical training through Artisan’s Clinical Education and Training division. The clinic, which has experienced strong growth post-COVID with a high volume of new clients, will continue to offer an extensive menu of treatments including laser and light therapies and cosmetic injectables including biostimulator treatments such as platelet rich plasma (PRP), while benefiting from Artisan’s ongoing investment in the latest treatments and technologies.  

Vita Group CEO, and founder of Artisan Aesthetic Clinics, Maxine Horne, said she is excited to mark the group’s 20th acquisition and welcome Coco Skin Laser Health to the group as it continues to establish itself as a leader within the premium end of Australia’s aesthetics industry, operating a national network of 70 premium clinics over the next five years.  

Coco Skin Laser Health is an excellent addition to our portfolio. As with Artisan, the clinic and its team are known for delivering exceptional, personalised servicewith a combination of treatments that achieve high-quality results for their clients. We are excited to welcome them to the Artisan family and to extend Artisan’s service offering further. 

Artisan Aesthetics Group – clinic network


  1. Artisan Aesthetic Clinic, Racecourse Road, Hamilton 
  2. Artisan Aesthetic Clinic, Gasworks, Newstead
  3. Artisan Aesthetic Clinic, Rosalie Village, Rosalie
  4. Artisan Aesthetic Clinic, Fortitude Valley
  5. Artisan Aesthetic Clinic, Bulimba
  6. Artisan Aesthetic Clinic, Maroochydore
  7. Artisan Aesthetic Clinic, Hope Island
  8. Artisan Aesthetic Clinic, Kenmore
  9. Emetheni, Burleigh Heads 
  10. The Bradford Clinic, Toowoomba
  11. Face Today Mediclinic, Cairns
  12. HC Medical, Robina  

New South Wales

  1. Artisan Aesthetic Clinic, Balmain
  2. Artisan Aesthetic Clinic, Mosman 
  3. Lily Room, Chatswood 
  4. Coco Skin Laser Health, Newcastle 

Australian Capital Territory

  1. Artisan Aesthetic Clinic, Bruce  
  2. Artisan Aesthetic Clinic, Woden 
  3. Artisan Aesthetic Clinic, Gungahlin


  1. Pamper Medical Skin Clinic, Geelong  
Read More