Cellnet shares have plunged 12.5 per cent after the distributor announced Optus would not be renewing its mobile accessories supply agreement.
The company advised the ASX today that Optus gave verbal notification it was ending the agreement, which represents eight per cent of Cellnet’s total business; prior to operating expenses, the contribution from the deal to Cellnet’s net profit before tax in FY21 was approximately $1.8 million.
Dave Clark, CEO of Cellnet, stressed that Cellnet was still “confident” in its business outlook, and that the company is “well equipped for change”.
“We plan to transition from Optus with a renewed focus on other channels including telco franchise, CE retail, online and B2B channels, which will further be supported by our recent brand acquisitions.
“We intend to further mitigate impact through streamlining of our operations and reduced direct and associated costs to serve the Optus corporate owned channel,” he said.
Cellnet says it plans to improve its working capital utilisation and reduce inventory costs; chase new business opportunities; and streamline operating costs in an effort to mitigate the loss of the agreement.
