23 August 2012 6:49am
Point of sale finance company ThinkSmart cited lower originations in its Australian rental business and a change in its accounting policy as the main reasons for its loss in the six months to June 2012.
Yesterday, the company reported a loss of A$1.5 million for the June half – down from a net profit of $2.9 million in the previous corresponding period. The company said it would report a loss for the full year.
The company has switched to lease accounting, which means that revenue is reported as it accrues, rather than at the time of origination. The change had a negative impact in the June half but will improve future earnings.
ThinkSmart was hit by weak retail trading conditions in Australia, particularly in the electronic goods sector. Originations of $10 million in Australia were down 30 per cent during the half.
The value of assets under management fell one per cent to $121 million.
In February, the company launched a payment plan product, Fido, which it hopes will complement its core RentSmart product. Fido accounted for $800,000 of sales during the half.
One bright spot was the United Kingdom business, launched in 2003, where originations of £7.2 million were up 63 per cent.