Cellnet closes three warehouses

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Cellnet closes three warehouses

IT distributor Cellnet has announced its plans to close and sublease its warehouses in South Australia, Victoria and Western Australia.

The distributor plans to reduce its IT distribution operations in A/NZ, to focus on the server and print segment of the market with selected vendors including IBM and Microsoft.

Sandy Beard, chairman of Cellnet’s Board, said, the decision follows a strategic review of its Australian operations.

“The returns being received from the desktop and laptop products currently being distributed,” he said.

“The server segment of the market and the mutually strategic relationship enjoyed with, amongst others, IBM is profitable and continues to enjoy greater market penetration.”

Beard denies the distributor has any difficulties, claiming it has a profitable and growing part of the business in the telco and retail divisions.
Although revenue is expected to decrease by $95 million per annum, reduced overheads will see bottom line improve.

“This move will see approximately $10 million in working capital over the next few months as inventory and debtors are realised,” he said.

“The use of these additional cash resources expected to be released has yet to be decided by the board and could include growing remaining parts of the businesses either organically or through acquisition.”

According to Beard the restructure will have a one-off cost of $2.5 million, and will include some redundancies.

The distribution of telco and retail products will continue to take place from Brisbane, said Beard.

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