By Claire Reilly

Documents released by Retravision Southern administrators reveal that the company suffered decreasing sales revenues and earnings over the three years before it entered into voluntary administration, resulting in profits that fell by more than 50 per cent, year on year.

Current.com.au has obtained financial statements, compiled by administrators KordaMentha, which show the comparative balance sheets and profit and loss statements for Retravision Southern (RVS). The figures are for the years ended 30 June 2009, 2010 and 2011, and the period 1 July to 31 March 2012.

Total revenue for RVS was $16 million in 2009, $13.3 million in 2010, $11.9 million in 2011 and $7.5 million for the 9-month 2012 financial period. Furthermore, earnings before interest and tax (EBIT) for these years were $244,591, $3.5 million, $2.9 million and $1.7 million respectively.

One of the standout years was 2009, when RVS made a $1.4 million loss due to high finance costs and “doubtful debts expense in relation to member store debts and an impairment of an intercompany loan” to the then Retravision Retail branch of the company.

But while RVS reported profits for the following three years, they declined from $1.6 million in 2010 to $746,696 in 2011, before plummeting to just $265,475 in the 9 months to 31 March 2012.

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KordaMentha attributed the grim figures to a range of factors, including a poor retail climate, a reduction in inventory in FY11 and “a large increase in intercompany loans in FY12.

“The financial statements of RVS disclose...a substantial reduction in revenue during FY11 corresponding with a decline in general consumer confidence due to economic conditions, decreased consumer discretionary spending being experienced by the retail industry generally and store closures, without new stores opening, leading to lower purchasing by stores.

“In addition RVS has been affected by general price deflation on audio visual products and had poor air conditioning seasons in 2010 and 2011 due to cooler summer temperatures in Victoria. This reduction in revenue continued into FY12.”

The company also made “a significant reduction in inventories during FY11 [and] made a concerted effort to reduce warehouse stock during this period”, while also experiencing a “substantial decrease in trade and other payables during FY11, which corresponds with the significant decrease in sales and inventories during the same period”.