Renaissance restoring balance sheet

A strong performance from Renaissance's education division helped mitigate continued difficulties in the distribution and retail divisions to keep the company in the black for the first half of the year.

According to the company's interim half-year result, net profit before tax was $239,000, along with $2.51 million in insurance proceeds from claims related to the Christchurch earthquake.

After experiencing a $400,000 loss in October as a result of 'further efforts to right-size the business', ending the period in the black was 'a good outcome', according to chairman Colin Giffney.

"Our balance sheet is rapidly being restored," Giffney says in a supporting statement.

"Receipt of insurance claims of $2.5m net in the last six months, along with a strong net operating cash flow, has gone a long way to taking the company back to where we were 18 months ago.

In total, $3.6 million of the company's $5.2 million in insurance claims has been paid, leaving a further $1.6 million still awaiting action.

On the downside, Giffney says the board has 'been delayed in reaching a satisfactory decision' on whether to sell or keep the company's distribution division, which has been operating 'under extreme difficulty' since the introduction of Ingram Micro as a second Apple distributor in New Zealand back in October 2010.

The retail division, Yoobee, has also been underperforming, with the campus stores in Auckland, Wellington and Dunedin all closing in March, and trading in Christchurch proving 'really difficult' following the February quake.

"There have been major distractions over the last 18 months," Giffney concludes.

"While next six months is also likely to have its distractions trading results year to date demonstrate we are on the right track.