Cellnet lifts profits in first half

Listed technology distributor hints at acquistions to make use of surplus cash

ASX listed technology distributor Cellnet (ASX:CLT) has reported strong profit growth for the half year to 31 December, recording a 64 per cent higher year-on-year profit of $1.524 million.

Revenue increased 1.3 per cent year-on-year to $44.657 million.

According to an ASX statement from the company, the growth is the result of an expanded customer base, a more rounded product offering and operational efficiencies.

Despite the profit increase the company has flagged that full capacity utilisation and effectively utilising available cash resources remain challenges.

“In this regard, several potential opportunities have been considered and the Company continues to seek appropriate opportunities,” the statement reads.

Last year Cellnet suggested it would use its cash reserves, then about $20 million, to explore merger or acquisition opportunities in the 2010 financial year.

“We’ve got an open mind,” Cellnet chairman, Alexander Beard, told ARN.

The company has also flagged the termination of its distribution agreement with Sandisk, finalised on 26 January, was likely to result in a revenue decrease of $2 million.

“The company’s operations in both Australia and New Zealand continue to grow and while it is too early in the financial year to provide guidance for the remainder of the financial year, the Company is optimistic earnings will further improve during the second half of the 2011 financial year,” the statement reads.

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