Eastern Hi Fi quietens down after poor result

Specialist audio-visual equipment retailer Eastern Hi-Fi has put expansion plans on hold as it strengthens its network of stores after a disappointing full-year result in May.

The managing director of the AX-listed company, Steve Allbury, said yesterday that missing its prospectus forecast "wasn't a disaster" with the company now focusing on consolidating its 10 stores - built up from six with the $5 million raised in the IPO.

A full-year net profit of $548,073 disclosed in May, was 23 per cent down on the previous year and less than half the $949,703 forecast at its December 2004 float.

Allbury said improved reporting systems and new IT systems connecting the stores had helped restore gross margins, which fell 3 per cent below budget on income of $18 million sales for the full year.

The company had also tried to achieve too much since listing, stretching resources and the staff of 70.

Despite a slowdown in retail sales and an expected net loss at the half-year, Allbury expected the company would peg that back for a "reasonable" full-year result.

He said plans to keep growing the number of stores would be revisited next year.

Allbury, who owns 48 per cent of the company, started Eastern Hi-Fi in 1975 working from the back of a van and a home garage in Howick.

As well as the retail stores, the group includes importing companies Avalon Audio and Pacific Audio and the wholesale marketing company Avalon-Pacific Marketing.

It holds local distribution rights to 12 premium brands, selling half its imports to other specialist retailers throughout the country.

Allbury, contracted to retain a 48 per cent holding in the company until March 2007, said he had no plans to sell any of his shares beyond that date.

Shares in Eastern Hi-Fi closed steady at 70c last night, having traded at between 68c and 86c in the past year.