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MTD looks to trim the fat

MTD looks to trim the fat

After almost six months in caretaker mode, the new owners of Melbourne-based hardware distributor, Magnafield Technology Distribution (MTD), are embarking on a capital raising drive.

Executive director, Michael Boorne, said its first initiative would be to ramp up ecommerce functionality to push reseller sales online. Board member, Dean Jones, who is also CEO of online search engine, Ansearch, would lead the project.

"A small percentage of the distribution business is coming from online, but we think a lot more can," Boorne said. "We're making big plans in that space." While its vendor line-up would remain similar, Boorne said it would stop promoting products that offered less than 10 per cent gross margin.

"One RA and we have lost money," he said. "So our aim is to rotate the prominence of products that don't make reasonable margins."

Current partners include Fujitsu, Altec Lansing, Microtek, Mag Innovision and Upsonic.

MTD would also use capital funds to grow its sales staff, Boorne said. It has appointed sales manager, Les Jessop, as interim general manager while it hunts for a permanent candidate.

A consortium of industry investors purchased MTD from satellite provider, Multiemedia, in March. Financials details were not disclosed. The acquisition followed a tumultuous time for the distributor, which saw revenues halved to $19 million in the four years since listing on the ASX in 2001. It made a loss in the 2005 financial year.

Boorne said monthly revenues had doubled since the consortium completed its takeover. The distributor was now making a profit.

"We've been in caretaker mode but we're jumping out of that and expect revenues to increase significantly in the next six months," he said.


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