ASX-listed Cellnet has terminated its distribution agreement with consumer storage vendor Sandisk.
In its half yearly financials, Cellnet reported the split was finalised on 26 January and was likely to result in a revenue loss of about $2 million. However, the impact on net profit was immaterial, said the company.
Cellnet’s first half net profit for the period ending 31 December was $1.524 million increasing 64 percent on the corresponding period.
Revenue for the period saw a slight growth of 1.3 percent to $44.657 million.
Cellnet said the result was in line with forecasts and was achieved through an “expanded customer base, a rounded quality product offering and efficiently operating business”.
The company was optimistic that earnings will further improve in the second half of 2011 financial year, but it was too early for guidance.
Share buy back
Last year’s share buy back program, a strategy to reduce shares on offer to increase their value, resulted in 3,626,717 shares being repurchased for a total of $1,174,000.
Managing director Stuart Smith told CRN in an earlier interview the directors believed the share price was undervalued.
Cellnet has denied liability that it received payment of $1.2 million by Leading Solutions “as an unfair preference” six months prior to Leading Solutions being placed into administration.
In an ASX-statement, Cellnet said it was summoned by Leading Solution’s liquidators McGrathNicol to pay the amount, but denied the claim.