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.