Cellnet's Davenport: "We must sacrifice precision for speed"

Embattled distributor Cellnet has taken the axe to its business again in another internal restructure which has seen the retrenchment of GM sales Darryl Tucker and the imminent closure of its Sydney and Melbourne warehouses.

The company has also reshuffled its middle management team with Byron Sellan to be appointed as Queensland state manager. Sellan takes over the role from Mark Hulm, who will become the new Queensland IT sales manager.

The company has also overhauled its team in Asia with Matthew Whiteside leaving the company to be replaced by current staffer Kylie Mason on 19 October.

Martin Bicknell, the former general manager of Loop Technology, will start as the replacement GM sales on 9 October.

In an internal staff memo viewed by CRN, the company's MD Adam Davenport (pictured) said that despite the company's merger of its Cassa, ITW and Cellnet business early last year, the company was continuing to experience difficulty in competing in its core telco and IT businesses.

“Recently we have been losing revenues from our traditionally strong Queensland base; both are well down on budget and on prior years," the memo said.

"Further, our HP sales in Queensland have been disappointing and we are behind the levels I committed to. To address these issues we need a fresh look at how we go to market in our home base of Queensland,” Davenport said.

Explaining the changes, Davenport said the company needed to be "relentless in looking for ways to be more effective, to provide world-class customer service and to reduce costs."

In a tone of urgency, he said that the company now had a plan, but the company needed to "execute it fast. We must sacrifice precision for speed."

Discussing his departure, Darryl Tucker said he had been given notice of the board's intention to retrench him only yesterday.

“Adam Davenport and the board gave me the notice and I didn’t put up much of fight,” he said. “After eleven years with [IT Wholesale] I felt it was the right time to move on.”

Tucker couldn’t give a specific reason for the retrenchment and said he had not had time to “speak directly with Davenport or the board” about the matter.

Davenport denies retrenching Tucker and said he left of his own accord.

CRN understands Cellnet will also close its NSW and Victorian warehouses effective next week.

When questioned, a Victorian warehouse employee said all distribution would subsequently go through the Brisbane warehouse and products will also be directly shipped to resellers.

“The sales team in each state still will continue to go out and make sales,” the employee said.

In defence of the move, Davenport said "93 percent of Cellnet's distribution business was already headed out of the Brisbane warehouse. Closing the other warehouses made sense."

The distributor will also be giving a new coat of paint to its call centre and online presence. The call centre will be rebranded the 'Cellnet Sales Centre’ and its online sales portal will be rebranded to ‘WebCell’.

Davenport said the rebranding would help Cellnet transition from "an IT sales model that focused on field sales people to one where the call centre and eCommerce are the key parts of our customer relationships.”

In a final result issued to the ASX on September 8, Cellnet reported that its net profit after tax dropped to 76 percent to $1.6 million for the year ending 30 June, 2006.

Annual sales increased by eight percent to $565 million, up from $524 million a year earlier. Earnings before interest and income tax slipped by 62 percent to $4.5 million, down from $11.8 million the year before.

Davenport (pictured) said in a preliminary results statement to the ASX in August that the fall was due to the distributor’s then reorganisation to improve “efficiency and reduce working capital”.

“The reorganisation established a strong foundation for the current year but has had a significant impact on earning for the year ended 30 June," he said.

Davenport said the company had money in the bank to use for future acquisitions.

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