Horne loses more Vita-lity after Telstra cut payments to stores

RICH-LISTER Maxine Horne’s stake in telco retailer Vita Group took a $9 million hit yesterday after Telstra said it would slash payments to the company.

Maxine Horne’s stake in telco retailer Vita Group took a $10 million hit yesterday. Picture: Mark Cranitch

RICH-LISTER Maxine Horne’s stake in telco retailer Vita Group took a $10 million hit yesterday after Telstra said it would slash payments to the company.

Vita has been under a cloud in recent months as Telstra renegotiated its agreement with the Brisbane-based company to run its chain of Telstra retail outlets around the country.

Vita told the ASX yesterday that Telstra planned to cut remuneration by 10 per cent from July and a further 10 per cent in both the 2019 and 2020 financial years.

Vita shares slumped 30 per cent to 90 cents yesterday, slashing $59.5 million from the company’s value. The company’s market value has slumped $203 million over the past week and its shares are down 72 per cent so far this year.

Ms Horne, who founded the company formerly known as Fone Zone with her ex-husband in 1994, has seen her 16 per cent stake in the company she still runs as chief executive lose $33 million over the past week.

Ms Horne said she was prepared to partner with Telstra to address market challenges but was concerned about the remuneration changes.

Vita last week said it was not looking to reduce the number of Telstra stores it operates after the telco giant flagged a restructure of its retail network, but will also not add any stores.

“We are concerned about the extent of these changes and are currently addressing these concerns with Telstra,” Ms Horne said. “We are working hard to restore investor confidence in our relationship with Telstra.”

Mr Horne, who remains the company’s largest single shareholder, said Vita had performed strongly and created value for Telstra over many years.

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.

Last year, Ms Horne, who has been dubbed Australia’s richest female chief executive, sold 25 million shares in the company for a total of $91.5 million.

Vita’s annual profit last year rose 39 per cent to $54.8 million on a 19 per cent increase in revenue to $645.1 million.