Cellnet has moved to quash industry speculation about its future and reassure resellers it will be around for the long haul. Speaking exclusively to ARN, recently appointed CEO of the Queensland-based distributor, Mark Bloomer, highlighted the need for stability but also promised to remain on the front foot.
Bloomer, who replaced Adam Davenport in May, now heads a senior management team of 12 with national business managers for IT, telco and retail. Five state managers also report directly to Bloomer and Todd Kirby has picked up his financial duties as group controller.
"There have been suggestions I would take a costcutting approach but that is not the strategy at all," Bloomer said. "There are freight costs and other areas of discretional spending where we can be more cost-conscious but there's no head-cutting planned because that's not the way for us to go forward."
Having touched $1.60 back in October, Cellnet shares were hovering around $0.90 at the time of writing. Bloomer attributed the significant fall to Telstra's appointing Brightstar as sole handset distributor, which he estimated had cost Cellnet revenues of about $40 million, and the recent demerger of Mercury Interactive, which he said had an impact of about $0.35.
"The share price reflects the asset value of the company and there's no doubt performance needs to be better," he said. "It's been hampered over the last two years by significant stock write-downs and ridiculous amounts of management change.
"But if you look at run rate of our Australian business now, it is about break even. There's no need for us to panic. There has been so much instability that people haven't been able to do their jobs. We need to get back to basics so the business can climb back within a controlled environment. Everybody has to step up and perform but I'm confident they'll do that."
While industry rumour has suggested major shareholder, CVC, could look to break Cellnet up and sell off the various divisions, Bloomer said the venture capitalist had been very supportive of the distributor's plans. It currently holds 23 per cent of Cellnet shares but can acquire a further 3 per cent every six months in accordance with ASX 'creeping' rules.