Cellnet lays off staff

Cellnet lays off staff

ASX-listed distributor, Cellnet, has made about 40 redundancies as part of a company restructure.

Managing director, Adam Davenport, said the cuts had been made to reduce operating costs and affected all divisions of the distribution group.

"We are looking to simplify the way we do business and there was some duplication that we were able to eliminate," he said. "Reviewing the way we manage inventory within our distribution facilities has allowed us to generate some savings.

"We are always looking for opportunities to improve our efficiency. There will be further streamlining but we are also looking to reinvest in other customer-facing areas."

While Cellnet achieved significant sales growth in the past financial year, profits were significantly down. As previously reported in ARN, the group had blamed a soft retail market, particularly in the six months to June, and a below par performance in selling higher margin products.

Despite seeing revenues increase from $447.1 million to $586 million in the financial year to June 30, the company saw its profits fall from $9.1 million to $6.1 million during the same period.

Davenport, who was appointed back in May, presented his reorganisation blueprint to the group's board on September 30. But after a meeting that lasted most of the day, he said there were still some details that need to be ironed out.

"I have made recommendations about areas where we should be looking to grow but there are still some things the board are worried about," he said. "They have requested more information and I hope to get that to them in the course of this week."

While the group previously operated six divisions, Davenport said this had now been reduced to three. It was still working with a branding consultancy on how to present itself to the market but those divisions would cover corporate, retail and its Mercury Mobility content and entertainment division.

The corporate division, headed by Darryl Tucker, will look after business formerly conducted through its IT Wholesale and Cassa subsidiaries. The retail arm, managed by Peter George, will distribute its telecommunications handsets and accessories as well as audio-visual equipment.

Cellnet will hold its annual general meeting on November 18.

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