Cellnet (ASX: CLT) founder and two-time CEO, Stephen Harrison, has resigned from the position after 15 months back in the role.
According to a statement posted to the ASX, he will be replaced by chief financial officer, Stuart Smith, who has been with the company for 12 months and was previously CFO at AAPT. Harrison will stay on-board as a non-executive director.
"Stephen has played a key role in changing the Cellnet operations and business model resulting in the company being in a much improved position," Cellnet chairman, Sandy Beard, said in the statement.
Harrison returned to Cellnet to takeover day-to-day operations in August 2007 and quickly set about restructuring the distribution business. His plans included placing more emphasis back on telecoms, as well as a review of its vendor portfolio.
In November, Harrison announced the company would scale down its IT distribution business and exit the PC and notebook space in favour of pursuing higher margin server and printer market segment. The decision saw Cellnet drop Toshiba, Lenovo, Asus and Acer PC and laptop product lines and retrench 35 staff.
As a result of the changes, Beard said the company ridded itself of debt and freed up over $10 million in working capital. As new chief, Smith will continue focusing on returning the business to profitability, the statement read.
Harrison initially planned to stay in the role for just 12 months.
“I’ve been in, tidied things up and got the business back on track,” he told ARN. “Cellnet is in a position now where we are financially sound, have money in the bank, and have a strong management structure in place.”
Harrison admitted his successor didn’t have extensive distribution experience, but said he had already implemented processes and systems that had made a positive difference to Cellnet’s financial position.
“It doesn’t take too long to get up to speed in distribution, but I actually think it’s good Stuart hasn’t been in distribution for too long because he looks at things with fresh eyes,” he said. “Stuart has a financial background and proved he is capable of running the business financially. He is also surrounded by a strong sales team, such as Aidan Fitzgerald [general manager of sales], Mike Wallace [general manager of telco] and Elaine Schillinger [general manager of consumer].
“He has never been a CEO before, but there are a lot of CFOs taking over companies now. The board has full confidence in him.”
Harrison will take the next few months off before re-evaluating his options.
“I’m not going anywhere – I’ll be taking a backseat but staying on the board,” he added.