Strathfield Narrows Losses

The Australian:

CAR radio and mobile phone retailer Strathfield Group (SRA) expects to report a profit this year and that its long-awaited turnaround is on track.

Strathfield today reported an unaudited net loss of $5.3 million for 2005/06, an improvement from a $10.8 million loss in the prior year.

The company said an audit was underway and no significant change to the fiscal 2006 result, which does not include any one-off profits from franchising, was expected.

“Management believe that Strathfield is well on track to return to a positive net profit after tax for fiscal 2007,” the company said in a statement.

“Strathfield management continues to focus on improving bottom line profits whilst decreasing the business risk profile.”

The specialty retailer also said chairman Marcus Einfeld would step aside, but remain as a non-executive director, while he dealt with “non-company related matters”.

Mr Einfeld, who was appointed chairman last November, has denied misleading a court to avoid a speeding fine after his car was caught by a speed camera in Sydney in January this year.

Strathfield said a new management team appointed in October 2005 had refocused the company’s product mix on mobiles and cars.

But topline sales had fallen following the withdrawal from a number of unprofitable stores and categories, including home entertainment.

Strathfield said it would continue to rollout a new franchising model announced in March this year, and it was progressing well.

“New management has also commenced to implement a franchising model for Strathfield and is pleased to advise the program is progressing well with 11 stores committed,” it said.

Five of those stores are already operating, with the remaining six to start trading as franchises shortly.