KEY POINTS:
Profit at Apple computer products distributor Renaissance is expected to fall by nearly a third this year.
Chairman Colin Giffney said at yesterday's annual meeting in Auckland that net profit before tax would be about $6 million this year compared to $8.7 million last year - a drop
of more than 31 per cent.
But the company would still maintain its dividend.
"Despite the reduced profit number, we believe we should be able to maintain a similar level of dividend for 2007," Giffney said.
Last year the company paid a dividend of 10.5c per share.
The launch by Apple of its online store in New Zealand in December had cut into margins, Giffney said.
"Changes in how prices are set and the way we now handle our foreign currency transactions with Apple have resulted in the overall margin available to Renaissance being reduced quite significantly."
The company had restructured to take account of the new environment and believed the impact on profit would be "more of a one-step change".
However, Apple's online store had also enhanced the presence of the brand, he said.
"We fully expect sales of Apple products will continue to show significant growth in 2007 and beyond as the flow of innovative products continues," Giffney said.
"In time we expect this growth will offset the step change in margin we have experienced."
Managing director Paul Johnston said the company's contract with Apple remained strong.
"We're going to do all we can to enhance that relationship but ... we have to accept that Apple has to continue to run its strategies with a global perspective and that may mean that there's more changes that they decide to go with, with regards to their business model."
Good growth was expected on last year's revenue of $163 million, although profit would also be affected by another major brand cutting the company's margins.
The board had developed a strategy aimed at mitigating risks and providing activities that could generate significant future growth.
Johnston said: "We are absolutely continuing with the current business ... but in parallel to that we have other business interests that we are working on which will broaden the portfolio of the company. That may or may not be in the IT industry."
Renaissance's shares closed down 2c yesterday at $1.09.
