Menu
Cellnet reports $1.17m profit

Cellnet reports $1.17m profit

ASX-listed distributor, Cellnet (ASX:CLT), has reported a net profit of $930,000 for the six months to December 31, 2009.

The result came off continuing operations revenue of $55.37 million, a drop of 19.5 percent year-on-year.

In a statement, Cellnet chairman, Alexander Beard, attributed $13.37 million of the revenue decline to its former handset distribution agreement with Telecom New Zealand, which was terminated in June 2008 but still contributed revenue in the six months to December 31, 2008.

Excluding the Telecom New Zealand arrangement, Cellnet’s year-on-year sales increased by $11.35m, or 26.2 percent, he said. The distributor’s gross profit margin percentage also rose from 11.6 percent to 20.4 percent in the six months to December 31, 2009.

The net profit is a significant turnaround on the previous first half, where Cellnet reported a net loss of $5.17m excluding discontinued operations. It is also in line with previous forecasts of up to $1.26m in net profit for the first-half. “[This] is a significant achievement in light of generally difficult retail trading conditions over the past six months,” Beard said in a statement. “A clear focus on customer service and a product offering targeting customer requirements and target markets has been instrumental in achieving this result.”

Cellnet CEO Stuart Smith said its focus on core business lines, along with more a more streamlined operational structure, enabled the distributor to return to profitability. Cellnet relocated its assembly line to China in March 2009, which proved significantly more cost-effective, he said.

“The revenue and sales increase was a significant achievement for us. That, combined with substantial cost reduction and getting a more streamlined supply chain, has contributed to the bottom line,” Stuart said.

Cellnet’s total first half revenue, including both continuing and discontinuing business, was $57.4m, a fall of 63.5 percent compared to first half 2008. The massive revenue drop stemmed from Cellnet’s decision to exit the PC distribution market.

“Exiting IT [distribution] has enabled us to focus on core business and produced the results we were expecting,” Smith said.


Follow Us

Join the newsletter!

Error: Please check your email address.

Tags cellnet

Featured

Slideshows

Looking back at the top 15 M&A deals in NZ during 2017

Looking back at the top 15 M&A deals in NZ during 2017

In 2017, merger and acquisitions fever reached new heights in New Zealand, with a host of big name deals dominating the headlines. Reseller News recaps the most important transactions of the Kiwi channel during the past 12 months.

Looking back at the top 15 M&A deals in NZ during 2017
Kiwi channel closes 2017 with After Hours

Kiwi channel closes 2017 with After Hours

The channel in New Zealand came together to celebrate the close of 2017, as the final After Hours played out in front of a bumper Auckland crowd.

Kiwi channel closes 2017 with After Hours
Meet the top performing HP partners in NZ

Meet the top performing HP partners in NZ

HP honoured leading partners across the channel at the Partner Awards 2017 in New Zealand, recognising excellence across the entire print and personal systems portfolio.

Meet the top performing HP partners in NZ
Show Comments