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CLT - CELLNET GROUP LIMITED


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Hi all,

 

Just thought I'd pop in and chew the fat on CLT since seeing an interesting related news item.

 

Cellnet was approx 65c when I first posted info on my watch list - 29.7.03 (on a different forum).

 

CLT is today sitting deservedly around $1.36, and in the last twelve months they have paid 10.5c in dividends.

 

Cellnet suffered when Nokia last year renegged on plans to renew agreements with several Aust companies - worse, some of these companies were highly reliant on Nokia for a substantial proportion of their revenue - again worse, Nokia kept them all dangling right up to the very last minute before they pulled the plug. Cellnet was one of those companies but it seems ...... what goes around comes around:

 

Sorry for the big build-up, but this is where I get to my point: The following is an extract from Slattery's InternetWatch - April 12, 2004 - page 5

 

Mobile business

 

Nokia stunned the communications industry last week when it announced that its first quarter sales will not reach targets and may even fall two per cent below sales generated in the first quarter of 2003. The companyÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s mobile phone and multimedia business groups performed poorly as mobile phone sales declined in Europe and Asia and the product mix was weighted more to the low end than had been forecast. www.nokia.com

 

copies of earlier posts follow:

_________

 

 

Sent: Friday, September 05, 2003 9:28 AM

Subject: CLT may surprise

 

Cellnet (CLT)

 

Don't underestimate after loss of Nokia contract. They have their own range of accessories (better margins), additional products and services, and are likely to have had a good year of trading.

 

__________

 

Watch List - Posted 29.7.03

 

CLT

 

Cellnet signed an agreement with Nokia earlier this year. They've also recently acquired a private IT company. Qld Invest Corp became a substantial shareholder in June.

 

__________

 

Great Ozzie stock,

Cris

 

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Nokia sales contributed less than 15% of after tax profit for the half ending 31-Dec-03, whilst not a insignificant sum, I believe the effect from the loss of the contract were overstated by many.

 

Coming from a social point of view I have noticed that Nokia is no longer the must have brand amongst mobile phone users with a lot of the smaller players taking up market share with niche products. Nokia is no longer the dominant force it once was and this can only be good news for cellnet.

 

I also see their IT division over taking the mobile division as he major source of revenue in the next few years with the increase in IT spending amongst companies. If they can get the margins right this should be a major factor in EPS and SP growth.

 

CLT has been in a strong uptrend since when the contract loss was announce with a heavily stacked buy side and strong dividend yield. IMO we should see the SP reach > $1.80 within the next 12 months.

 

I hold shares in CLT, so take from this what you will.

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Hi Mick,

 

Great pick. Agree with your perspective on the market to.

 

To clarify - ' ... worse, some of these companies were highly reliant on Nokia for a substantial proportion of their revenue ... '

 

Cellnet was not one of those highly reliant on Nokia for revenue though I'm sure you'll remember companies involved in repair of Nokia mobiles were devastated. (I should have communicated this more clearly.)

 

Cellnet was amongst those who were impacted from delayed pull of the plug.

 

Regards,

Cris

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  • 2 weeks later...

Read this article today on how mobile phone sales are the highest they have ever been, with handset sales up 75% over the same time last year. I wonder how this will translate to CLT revenue for the year. I think we may be pleseantly surprised with the end of year results. We'll be looking at a fat juicy dividend of 10c per share hopefully http://www.sharescene.com/html/emoticons/wink.gif

 

http://www.theage.com.au/articles/2004/04/...2530232049.html

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  • 10 months later...
I thought the CLT HY result looked a good one, despite relatively low profit growth. Revenue up 49% with increased diversification of revenue sources and reduced reliance on external contracts. Cashflow down due to increase in working capital, but dividend is still able to be increased. For a share that is on a P/E of 8.7, dividend yield of 7.4% and price/sales of 0.27, I would have thought any increase in profits should see investors re-rate this share a little, rather than just re-tracing the fall-off of the last few days...
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