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EXCLUSIVE: Lenovo Sales Up 10% Profits Fall 69%

Lenovo has reported a 10% lift in revenues however profits have fallen 69% from $12.5 million in 2018 to $3.37 in 2019.

Revenue went from from $728M in the 2018/2019 financial year to $799M in their latest filings.

A major supplier of notebooks to Officeworks, JB Hi Fi, The Good Guys and Harvey Norman the #1 global PC Company saw top line sales increase by 10% B2b services accounted for $38.8M.

ChannelNews understands that the NSW based Company has won several services contracts from competitors.

54% of their notebook sales were Windows based Intel powered machines followed by Chromebooks of $11.4M.

Overall sales of notebooks was $426M.

The Company sold $28M worth of tablets, workstations accounted for $24M in sales.

Rebates to retailers are believed to have had an impact on the Company’s overall profits.

Currently the Company is making a move to gain further share in the PC gaming market with a new range of Legion gaming PC’s.

They have entered the voice activated smart home market which is seen by retailers as a growth market with the Chinese Company now ranging smart light bulbs.

Property Plant and equipment (fixed assets) dropped by over $1M during the past year, which reveals a slowdown in local investment.

In 2018 the Company spent $568K Vs $385K in the current financial year on local infrastructure.

One of the biggest impacts on the accounts in 2019 is the $7.7m FX loss, which was caused by the volatility in the Australian dollar.

Another big impact in 2019 was the accounting for their receivable allowance (rebates; returns; bad debts).

This increased by$ 1.2M however no explanation has been given for this increase other than a more conservative treatment on their debtors.

Share based payment issued in 2019 increased to $292K Vs $6K in 2018.

There are several payments to interrelated Lenovo entities

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