Total rental revenues for the period grew 16% to $116.7 million due primarily to the continued high level of demand for flat panel TVs and PCs.

Radio's Past-due agreements are tracking 15% below fiscal 06/07 and charge-offs continue to decline.

Radio Rentals (RR Australia), Australia's largest rent-to-own company, today reported fiscal full year 07/08 Profit after Tax of $10.9 million, a 67% increase over the prior fiscal year.

Company officials are especially pleased that the 4% increase in customers, turning around a 3.7% decline in the prior year. The Sydney, Melbourne and Brisbane markets were major growth areas, primarily driven by a significant increase in TV advertising.

John Hughes, RR Australia's Managing Director, predicts that Australia's difficult economic environment will continue to drive growth. "RR Australia is in a very strong position to benefit from any further consumer downturn, given our rental offering. Growth in new business is encouraging and we will continue to pursue a strong marketing approach that has proven to be extremely effective," said Hughes.

Radio's Past-due agreements are tracking 15% below fiscal 06/07 and charge-offs continue to decline. "Our focus on matching customer risk to product value, ensuring customer affordability, making automated payments mandatory and introducing a number of new account collection processes, has certainly stood us in good stead," explained Hughes. Automated debits account for 65% of Radio Rentals' revenue.

The Company launched three new strategic initiatives during the fiscal year: a trial of cash loans in Tasmania, the opening of two new stores under the Rentlo brand in South Australia and the development of a retail internet business.

Hughes said the trial of cash loans in Tasmania has now been extended to Victoria. "We will continue to monitor progress before deciding to launch nationally," Hughes said. "The South Australian [Rentlo] stores, which opened in April, met with an incredible level of demand that is outstripping resources. In regard to the internet retail offering, feedback from suppliers and consumer research is even more positive than anticipated. As we move forward into the 08/09 period we will continue our emphasis on driving the core rental business."

Radio Rentals opened its first store in Sydney, Australia in 1937, making it the oldest continually operating company in the sector worldwide.

Total rental revenues for the period grew 16% to $116.7 million due primarily to the continued high level of demand for flat panel TVs and PCs. The increase was mirrored in the growth of Radio Rental's 36 month "Rent Try Buy" (RTB) contracts, which accounted for 34% of total rental income, up from 20% in the previous year.

Rent Try Buy is roughly equivalent to a rent-to-own agreement in the states. Radio Rentals moved from Rent-to-Rent to Rent-to-Own to stop the decline in its customer base due to the high "churn" on rent-to-rent contracts. In 2007, Radio Rentals reported a keep-rate of over 40% for 36 month RTB customers.

RTB agreements are 18 or 36 month rental contracts with an option to buy a similar product after 36 months for $1. Alternatively, the customer can make an offer to purchase the product being rented at the end of the rental term which the company can either accept or deny. Radio also offers Rent, Try, Buy Plus – which is similar to the 18 month RTB, except the customer pays a premium for the ability to return the product any time after 6 months, incurring an early termination fee. The customer can also reinstate the rental at any time during the next 12 months.

The company also reported strengthening of finance lease revenues, which rose by 76.8%. Operating lease revenue was slightly down by 1.3% at $78.2m compared to $79.2m in the previous year. Within the operating lease segment whitegoods remained fairly flat, while furniture increased 64% and fitness product revenues grew 800%.

The enhanced revenues generated a gross profit of $71.5 million, up 11% from the prior year, resulting in a 32% increase in earnings before interest and tax of $16.2 million.

Net cash from operating activities increased 14%, despite a 23% increase in rental merchandise purchases.

The Company ended the year with a gearing (ratio of net debt to equity) of just 8%, zero net debt and $15 million in available funding. It is anticipated that these funds will be used to support the strategic initiatives currently in progress.