Cellnet boss hints at simplified structure

Cellnet boss hints at simplified structure

Cellnet managing director, Adam Davenport, has dropped his biggest hint yet that the distribution group's structure will be significantly altered by a soon to be implemented reorganisation program.

Speaking after confirming profits of $6.1 million for the financial year ended June 30, Davenport said the focus now would be on refining its business model to improve profitability and customer service levels.

He would not be drawn on speculation that the new look Cellnet Group would offer Cellnet, Cassa and IT Wholesale resellers a single point of contact.

"We are not necessarily going to a single point of contact model but we are certainly looking to simplify the way we do business," he said. "We are looking very carefully at the way we want to be branded."

Its technology distribution subsidiaries - Cassa and IT Wholesale - have had an encouraging year. The group's IT division recorded a 51.7 per cent rise in revenues to $255 million with pre-tax profits up more than 150 per cent to reach $2.55 million.

"We have historically been known as a Queensland organisation but have now developed a much stronger national footprint," Davenport said. "We also have started to introduce our IT products into [primarily retail] channels where we have traditionally sold our telecommunications products.

"We are trying to drive cross-selling opportunities. It hasn't been significant yet but it is something we are working on."

Cellnet's telecommunication arm fared less well. Revenues passed $330 million, up by 18.8 per cent, but pre-tax profits slumped more than 40 per cent to $7.86 million.

The distributor had previously expected overall profits to be in the $7.3 million to $7.5 million range but revised its forecast down after suffering a difficult six months.

Another aspect of the reorganisation will see Cellnet addressing its inventory management, with Davenport creating a new general manager of supply chain role.

He said a senior manager had been identified and was expected to take the position shortly.

Davenport said he had taken advice from vendors, resellers and employees with regard to the reorganisation and expected to present his proposals to the board within weeks.

"There is a lot of product convergence out there and boundaries are starting to disappear," he said. "The broad range of channels to market will assist us."

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