Thorn Group's prickly outlook

Thorn Group’s lacklustre outlook for the current financial year is weighing on the stock as it share price slumped to a two-week low this morning after the release of the group’s first half result.

Thorn Group’s (TGA) lacklustre outlook for the current financial year is weighing on the stock as it share price slumped to a two-week low this morning after the release of the group’s first half result.

Thorn Group, which owns the Radio Rental retail chain, posted a 2.9% increase in underlying net profit to $13.5 million as sales improved 12% to $112.7 million for the six months to end September 2013.

Management also tempered expectations for 2013-14 stating that earnings will be flat due to investments in new business divisions, such as Rent Drive Buy – a vehicle leasing business, and said that these new initiatives would only pay off over the “medium to long term”.

The stock dropped 4 cents, or 1.6%, to $2.45 in morning trade as the market had been expecting a 6% increase in adjusted net profit to $29.7 million for the year ending March 31, 2014.

The stock, which is part of the Uncapped 100, is still up 21% since the start of the year.