Vita shares dive over telco rejig

VITA Group says it is not looking to reduce the number of Telstra stores it runs after the telco flagged a restructure of its retail network, but will not add any stores.

Shares in Vita plunged more than a quarter yesterday after it warned payments from Telstra could be reduced because of competition in the mobile market and the impact of the rollout of the national broadband network.

Vita chief financial officer Andrew Leyden said the two companies were discussing a new remuneration and commercial agreement, and any plans to expand Vita’s store network had been suspended until an agreement was reached. “You shouldn’t read into that that we’re actively looking to reduce the portfolio,” he told investors.

Vita, a Brisbane-based electronics and telecommunications retailer, is licenced to run many of Telstra’s shops.

Telstra wants to reorganise its store network into geographical clusters and Vita, which operates 107 stores in 35 of those 48 clusters, says it supports the move as it had already been rolling out a similar strategy the past three years.

Vita shares closed 30.5 per cent lower at $1.55.