Mobile phone retailer Fone Zone has cited prolonged discussions with owner Telstra for failing to announce details of its disappointing trading outlook.
On 11 December it was reported that Fone Zone’s earning before interest, taxation, depreciation and amortisation will slump a huge 40 percent in the six months to December 2006. However, Fone Zone failed to release a trading update to the stock exchange until the 18 December.
ASX rules state that once a firm is aware of any information that will affect its price or value, the ASX should be informed immediately.
Fone Zone was queried by the ASX about the delay, but the retailer claimed it was in “extensive confidential discussions” with Telstra on a number of issues and was reviewing its performance up until the 15 December.
The Fone Zone statement said, “as soon as the financial and timing effects of the confidential discussions [with Telstra] and the reviews were known, a full reforecast for the half and full year was completed by management and immediately distributed.”
FoneZone blamed its bleak fiscal outlook on stock limitations for its range of NextG handsets, which had reduced the firm’s gross operating margin.
“The limited NextG handset range and short term supply issues have restricted Fone Zone from fully satisfying the growth in customer demand,” claimed Fone Zone.
By: Trevor Treharne
Online Editor, CRN
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