Disappointing Year for Mitre 10 and Danks

Mitre 10 Australia Ltd has announced a loss for its financial year 2004/05, due to substantial business restructuring and one-off write downs, in addition to a weaker retail market. The company has announced a $10m loss after tax, including $12.4m (pre-tax) in restructuring costs and one-off write downs, primarily related to Mega store start-up costs and organisational restructuring. Mitre 10’s business was also impacted by a second-half retail downturn, which saw revenue dip by 4% for the past year. Mitre 10’s Australia CEO, Bernie Bicknell, said Mitre 10 was undergoing considerable change, with a focus on improving the way it does business.

“The results for the past year are due largely to significant restructuring and write-offs which now place the company in a good position for growth and prosperity,” Mr Bicknell said.

The Mega business restructuring includes the acquisition of three out of the four existing Mega businesses by Mitre 10. This will allow Mitre 10 direct control of the Mega operation to grow existing stores more effectively and integrates the Mega offer into the core business. It also allows current Mitre 10 store owners to participate in the ownership and operation of future Mega stores.

“Mitre 10 is committed to the Mega business as part of our strategy, evidenced by our Lilydale (Vic) store opening in March 2006. In future, we will focus on improving store formats and layout and boost these stores’ appeal to consumers,” he said.

“Notwithstanding these disappointing results, we’re now well positioned for growth and there are early indications that the strategy now in place is starting to generate strong results.”

“Our first quarter results for the current financial year show a profit and an improvement over last year’s bottom line for the same period, with the cost savings and other business improvements recently put in place already ‘sticking’.”