Renaissance issues growth 'reality check'

Renaissance Corp, the local distributor of Apple computers and iPod music players, is warning investors not to expect the stellar profit growth of the past few years to continue at the same clip.

In February, Renaissance posted a 121 per cent increase in December year profit to $5.1 million - due largely to the popularity of Apple's flagship iPod portable music player.

Profit growth would likely slow to a more modest 20 per cent in the 2006 year, Renaissance's managing director, Paul Johnson, told shareholders at the company's annual meeting in Auckland.

"At 20 per cent we are still outstripping the rest of the industry," he said, adding that year-to-date sales were ahead of last year.

Renaissance chairman Richard Ebbett said the listed minnow, having broken through the $5m profit mark, now appealed to a broader investor audience and was looking to build market awareness.

Renaissance shares have climbed from less than $1 this time last year, closing yesterday at $1.45. They hit a high of $1.60 in January.

Mr Ebbett said the firm's Apple computer division had a brilliant year, surpassing expectations.

Renaissance has sole rights to distribute Apple's products in New Zealand and has benefitted from the near-cult following of Apple's iPod MP3 player, with demand outstripping supply since its introduction two years ago.

"Because of this, we are yet to fully test its market potential," Mr Ebbett said.

Renaissance's e-commerce division, Conduit, also performed well, landing the contract to build Telecom's online trading site, Ferrit -- its biggest ever transactional website deal.

Working capital management resulted in interest costs reducing despite a 30 per cent increase in turnover.

Despite the much reported slowdown of the New Zealand economy, Renaissance was experiencing overall growth in its business and expected that to continue.

"The recent sharp fall in the value of the New Zealand dollar has resulted in some price increases, a rare event in our industry, but we do not expect this to have a significant effect on sales activity," Mr Ebbett said.

- NZPA