Renaissance loses Apple exclusivity

Contract change expected to impact on revenue

Apple has changed its supply arrangements in New Zealand, causing shares in its current sole distributor Renaissance Corporation to fall sharply today.

Apple moving away from its exclusive distributorship to a "multi-source" model, Renaissance announced to the NZX today.

Renaissance shares were down 12 cents, from at 2.45 today after the news was announced to the market.

Renaissance says the change will allow some retailers the company currently supplies to purchase directly from Apple. Changes will also be introduced to Renaissance's margin structure, to be phased in by 1 October.

"While the timing and quantum of these changes are not easy to predict, we expect the sales volume and profit achieved by Renaissance from our Apple distribution business will fall," the company told shareholders today. "We expect the full impact on the Apple distribution business will be spread over 2008 and 2009."

Renaissance says the year to December 2007 should finish within previous guidance of a net profit before tax of $5 million to $5.5 million. The company says trading was difficult throughout the year, and supply restrictions of iMac and Apple portable products impacted preformance.

Renaissance bought the MagnumMac chain last year.

It says its non-Apple-distribution activities will grow from an EBITDA contribution of less than 10% in 2006 to one that is expected to be greater than 60% in 2008.

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