Apple PC distributor hit with write-offs

Apple distributor Renaissance says its Magnum Mac chain has underperformed.

NZX-listed technology company Renaissance Corporation - best known as a distributor of Apple computers and devices - has reported a disappointing full-year result just weeks after appointing a new chief executive.

On Tuesday the company posted a preliminary $2.7 million pre-tax loss for the year to December 31, compared with a $1.2 million profit for the 2008 year. Revenue increased by just under 3 per cent, from $189.6 million in 2008 to $194.8 million.

The company said it had notched up $3.4 million in one-off expenses and write-offs during last year and while most of the charges had no cash consequences, as a result it was in breach of one of its bank covenants relating to interest cover.

The unusual items included just over $1 million related to "stock obsolescence and stocktake variances", $592,000 associated with senior management changes, and $755,000 in costs related to winding up three business ventures: Txttunes, Widget and Renaissance Indemnity.

It wrote-off almost $900,000 in goodwill associated with two other ventures: Insite Technology ($791,000) and Educational Computers ($90,000).

The company described last year's performance of its flagship MagnumMac Apple retail chain as a "disappointment". That part of the business recorded a $1.6 million loss and the company wrote down a further $740,000 related to "stock adjustments and other one-off costs". However, the company said it was confident about MagnumMac's prospects under a new leadership team put together over the past six months.

Renaissance suffered a major blow in 2008 when it lost its exclusive New Zealand distribution rights for Apple products.

Managing director Paul Johnston left Renaissance last year and was replaced last month by chief executive Richard Webb, whose most recent role was as founder and chairman of an Australian business incubator, Red Ocean.

Renaissance said Webb intended to carry out a restructure which would be outlined to shareholders in the company's annual report next month.

Former Renaissance head Johnston, meanwhile, has become managing director of a new local technology distribution business, Simms International.

Renaissance shares closed unchanged yesterday at 21c, 1c above their 12-month low.