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Skin deep: Vita Group cuts growth expectation, writes down $14m

Vita Group’s transformation from a phone retailer into a beauty company has hit a hurdle and forced a goodwill write down of $12.4 million, which led to a first half loss of $16 million.

Feb 28, 2023, updated Feb 28, 2023
Vita Group's profit has plunged

Vita Group's profit has plunged

The Brisbane company is transitioning from its role as a Telstra mobile phone licensee to a beauty group through its Artisan brand but the transformation has not gone according to plan.

“Whilst the group remains optimistic about Artisan’s medium-term business prospects, Vita’s board has determined that it is prudent to moderate growth expectations and has revised the carrying value of the business given the changing macro-economic environment and ongoing impacts associated with Covid-19,” the company told investors today.

Excluding the write down, Vita’s first half result was a $5.6 million loss.

There was an expectation that the company would not break even on a monthly EBITDA basis until 2024.

But the issues were not about a lack of clients for its Artisan clinics. Its active client database increased 7 per cent and the annual average spend was down only fractionally. Client visits were up 13 per cent.

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Future bookings were 30 per cent higher than April 2022 and its revenue for the first half was up 12 per cent.

So far this calendar year, Vita said its revenue was up 18 per cent and client visits had increased by 23 per cent. EBITDA for January was up 23 per cent.

“Whilst the macro-economic environment remains uncertain, Vita is positioned to drive organic growth by maintaining its focus on the execution of its evolved business model programs including increasing its marketing investment,” the company said.

“Vita continues to target monthly underlying EBITDA to break-even during full year 2024.”

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