Snap upbeat on 09/10 results but turnover down $3m after shedding franchises

In documents lodged with ASIC for the full-year to 30 June 2010, Perth-headquartered Snap Franchising Ltd posted revenue of $13.75m across the consolidated group, down $3.07m, an 18.4% fall from its 08/09 revenues of $16.82m.

The group’s post-tax profits were down $360,000, a 15.6% fall from $2.31m in 08/09 to $1.95m for 2009/10.

However, this means the consolidated group managed to slightly increase its profit margin, from 13.7% in 08/09 to 14.2% in 09/10. 

Revenues are predominately made up of royalty fees from its franchise network, which includes 147 centres and three hubs in Australia, as well as locations in New Zealand, Ireland and China.

Snap chief executive Grant Vernon told ProPrint that revenues were down following the sale of seven “larger franchises that deal with the significant corporate accounts”.

“We owned a number of franchises and we sold them just before the end of the financial year. All the sales revenues from the franchises were reflected in the prior year, so that explains the decline,” he said.

Vernon said that cost savings through restructuring had helped lessen the blow to profits, though added that “we have continued to invest quite heavily in the business, so there hasn’t been a huge effort to pull costs out of the business”.

He said the company’s major focus was to continue to invest in “strategic initiatives”, such as its ‘Level 2’ marketing communication offering, along with variable-data print service Snap Direct and the roll-out of new MIS Prism

“We had a year in which our sales held up fairly well. We brought a number of abnormal items to account that affected the overall results. We were quite happy with how we held sales together and the progress we made on strategic fronts,” said Vernon.

“We invested quite heavily in a number in items and as a consequence of the year we had, we made a decision to write off a number things. It was a clean-up year.”

The report included a $316,000 impairment loss relating to its investment in Press-sense MIS, which it replaced with Prism following Press-sense’s fall into administration last year.

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